UBS to pay £940 million to settle Libor manipulation charges

Swiss banking giant UBS has agreed to pay £940 million to regulators to settle charges of manipulating Libor interest rates, fraud and bribing brokers.
 
This is the second-largest fine paid by a bank, and is over three times the £290 million fine levied on Barclays in June for attempts at fixing the Libor benchmark rate used for pricing financial contracts around the world (See: Barclays fined $452 million for Libor, Euribor manipulations).

The lender's 1.4 billion Swiss franc (£940 million) fine includes a £160 million payment to the Financial Services Authority, the largest penalty ever levied by the British watchdog, $1.2 billion paid to US authorities and a 59 million Swiss franc 'disgorgement of profits' order from the Swiss.

As part of the settlement, UBS' Japanese arm has agreed to enter a plea to one count of wire fraud over the manipulation of certain benchmark interest rates, including Yen Libor.

The heavy fine for UBS is despite cooperation extended by the bank, to law-enforcement agencies in their probes from 2011. According to the bank, it received conditional immunity from some regulators.

A statement released by UBS today, said certain personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions".
 
The year has been particularly bad for the Swiss-based UBS, with the jailing of London-based rogue trader Kweku Adoboli in addition to a £29.7 million FSA fine last month for lax controls.

The bank, which employs 6,500 in London and bought respected homegrown City investment bank, Warburgs, in 1995, is letting go of 10,000 of its staff across its global operations. According to the regulator, at least 45 senior managers, traders and Libor-rate submitters at UBS were involved in rate fixing, and up to 70 more were in the know as to what was going on.
 
Over 2,000 requests for rates to be manipulated - of Libor and its Japanese and euro equivalents had been documented, in addition to an ''unquantifiable number'' of verbal requests.