A former UBS trader barred from financial markets for his part in the Libor fixing scandal has today started an appeal against the Financial Conduct Authority’s (FCA) ban, saying the Swiss investment bank bears the responsibility.
Arif Hussein will argue the fixing of Libor (the London Interbank Offered Rate) by other colleagues was the responsibility of more senior members of his firm, and that he was told to tell the Libor submitters his preference for the rate.
Lawyers acting for Hussein will argue his actions were “mandated, sanctioned by the words and conduct of his senior managers and the policy of the Bank”, according to a skeleton argument admitted in the High Court in London this morning.
Hussein’s representatives will argue his actions were “neither dishonest nor reckless” as they were sanctioned by the bank, meaning the FCA’s decision is not valid. The FCA is contesting the claims.
Sara George, a partner at law firm Stephenson Harwood and counsel for Hussein, said: “Arif Hussein, a very junior trader, has been penalised by the FCA when other, more senior bankers, with an involvement and responsibility for setting up the structures and regime which Mr Hussein was mandated to follow, have been allowed to walk away without consequence.”
She added: “Arif Hussein’s actions, from which he derived no personal benefit at all, were simply routine, in accordance with his employer's policies and procedures, consistent with his understanding of what was good practice at UBS and the actions of another 40 employees, managers and even senior managers, yet he is the only employee facing these allegations.”
The FCA, the City regulator, banned Hussein in April 2016, saying he was not a fit and proper person to work in financial markets.
Hussein was head of UBS’s sterling rates desk, where he was involved in trading interest rate derivatives referencing Libor, which was widely used as the so-called risk-free benchmark rate for borrowing by banks.
In its 2016 decision notice the FCA said Hussein told the bank’s Libor submitters his preference for the sterling Libor rates 21 times in chat applications.
The FCA and UBS declined to comment on the case, which continues in the High Court.