UBS will pay $1.5bn in penalties for routinely manipulating benchmark interest rates over a six-year period to benefit its own trades, paying bribes to interdealer brokers and colluding with other banks.
Bloomberg reports that regulators found that traders at the Zurich-based bank made more than 2,000 requests to its own rate submitters, traders at other banks and brokers to manipulate rate submissions through 2010, the U.K. Financial Services Authority said. The lender paid brokers as much as $24,400 a quarter over at least 18 months to help manipulate Japanese Yen Libor submissions by other banks.
The financial penalties are more than triple what Barclays Plc (BARC) agreed to pay in June in the first settlement of Libor rigging allegations.
'UBS’s misconduct is, although similar in nature, considerably more serious than Barclays’ because it was more widespread within the firm', the FSA said. 'More individuals, including managers and senior managers, participated in or knew about the manipulation'.
The findings are part of settlements with regulators in three countries over allegations UBS colluded to manipulate the London interbank offered rate and at least five other benchmarks. UBS will pay $1.2bn in the U.S. and the bank’s unit in Japan agreed to enter a guilty plea to wire fraud for manipulating benchmark interest rates including yen Libor, UBS said Wednesday. It was fined $260m by the FSA and must disgorge $64m in estimated profits to the Swiss Financial Market Supervisory Authority.
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