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UBS pays $545 million over FX and rate fraud

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The Local/AFP - [email protected]
UBS pays $545 million over FX and rate fraud
Photo: Martin Abegglen

UBS, Switzerland's largest bank, says that it will plead guilty to fraud in the US for manipulating benchmark interest rates and pay $545 million in fines and penalties.

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A 2012 agreement between the bank and US authorities to drop charges over the so-called Libor scandal had been overturned by officials, the bank said in a statement issued on Wednesday.

UBS said it had agreed to plead guilty to one count of fraud in connection with manipulation of the Libor rate, pay a $203 million fine and accept a three-year term of probation.

UBS was fined 1.4 billion francs ($1.49 billion) in 2012 by Swiss authorities for its part in manipulating the benchmark rate.

The Board of Governors of the Federal Reserve System and the Connecticut Department of Banking also jointly issued a finding that UBS engaged in "unsafe and unsound business practices" relating to its foreign exchange business.

UBS said it had not been criminally charged with regard to its FX operations but it is to pay the Fed a penalty of $342 million and has agreed to "undertake a series of remedial measures".

"The conduct of a small group of employees was unacceptable and we have taken appropriate disciplinary actions," UBS Chairman Axel Weber and CEO Sergio Ermotti said in a joint statement.

They said that UBS "self-detected this matter" and reported it to the US Department of Justice and other authorities.

"Our actions demonstrate our determination to pursue a policy of zero tolerance for misconduct and a desire to promote the right culture in our industry".

UBS said it continues to cooperate with ongoing investigations, including investigations of individuals by American authorities.

Despite the significant penalties, UBS said it had already made provisions for the payments and said there would be no financial impact on second quarter 2015 results.

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