UBS has instituted significant cultural and compliance changes

Sergio Ermotti Interview Pic

UBS has reached resolutions with the Swiss Financial Market Supervisory Authority (FINMA), the US Commodity Futures Trading Commission (CFTC) and the UK Financial Conduct Authority (FCA) in connection with their industry-wide investigations into irregularities in foreign exchange (FX) markets.

FINMA issued an order concluding its formal proceedings with respect to UBS and the firm simultaneously completed settlements with the CFTC and the FCA.

UBS Group Chief Executive Officer Sergio P. Ermotti said, 'Today's resolutions are an important step in our transformation process and towards closing this industry-wide matter for UBS. We continue to cooperate with related ongoing investigations'.

FINMA has ordered UBS to pay CHF 134m ($139m) in confiscation of costs avoided and profits. In addition, UBS has agreed to pay $290m (approximately CHF 281m) in fines to the CFTC in connection with settlements agreed to by a number of banks. UBS also agreed a $372.9m fine with the FCA in connection with settlements agreed to by a number of banks. UBS provisioned fully for these charges in the third quarter of 2014. The conduct described in the settlements and order includes attempts by UBS employees to manipulate the prices of G10 foreign exchange spot and benchmark rates, including collusion by UBS employees with employees of other banks and inappropriate sharing of confidential information in relation to G10 foreign exchange spot trading. The regulatory resolutions also include certain remediation measures, many of which already have been or are being implemented by UBS.

Over the last few years, UBS has instituted significant cultural and compliance changes and has received positive feedback from regulators, clients and other stakeholders on its progress. UBS was the first bank to self-report potential misconduct and cooperate fully with authorities in their review of FX and related markets. The firm took appropriate disciplinary action against employees involved in the matter. In addition, and in line with its findings and regulatory requirements, UBS has introduced significant enhancements to the control framework of its FX business and the entire firm.

UBS continues to cooperate with ongoing FX and related investigations, which include investigations of individuals involved.

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