Serial rules breaker UBS announced on Wednesday, May 20th that it has agreed to pay more than $500 million in fines to U.S. financial regulators for its role in the LIBOR scandal involving manipulation of currency markets and benchmark interest rates.
The statement from UBS noted the bank would not face criminal charges, but would separately plead guilty to a criminal charge for its prior conduct over the manipulation of key interest rates such as the London interbank offered rate (LIBOR) after the Justice Department rescinded a nonprosecution agreement signed in 2012.
The new settlement with the Swiss bank finalizes a series of investigations by the Justice Department and other state and federal authorities, into the bank’s manipulation of currencies.
Statement from UBS CEO and CoB
“The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions,” Axel A. Weber, the chairman of the UBS board, and Sergio P. Ermotti, the UBS CEO, said in a statement released Monday.
“We made significant investments to strengthen our control framework and compliance programs,” they noted. “We self-detected this matter and reported it to the U.S. 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.”
More on UBS and LIBOR scandal
Of note, UBS was one of several large banks that paid penalties totaling to $4.25 billion in November of last year to settle with British and Swiss regulators and the U.S. CFTC for their role in manipulating currency markets over a several year period.
According to this most recent agreement, UBS will pay $342 million to the Federal Reserve to settle the LIBOR foreign currency investigation, but will receive conditional immunity from prosecution by the Justice Department. The statement said the immunity related to its role as the firm that first reported potential misconduct to the Justice Department.
The statement from the Swiss bank also noted the Federal Reserve and the Connecticut Department of Banking will jointly issue a cease-and-desist order finding that UBS engaged in “unsafe and unsound business practices” pertaining to currency trading.
Back in December of 2012, UBS agreed to cough up a total of $1.5 billion to regulators in the U.S., UK and Switzerland for its participation in the manipulation of benchmark interest rates.