UBS

The Swiss bank is in the clear when it comes to further fines and all it has to do is rat out all the other banks it knows is engaging in the same thing its own employees have done. Read more »

Convicted insider trader John Joseph Hartman and his brother planned to “make a lot of money” by bribing high-profile jockey Danny Nikolic to rig horse races, a court has heard. On his second day of evidence in the committal hearing against his former best friend Oliver Curtis, John Hartman admitted under cross-examination that his brother, UBS banker Edward Hartman, had concocted the plan to make tens of thousands of dollars in 2008. Edward Hartman wrote in an email to John on August 29, 2008, saying the deal could “only be between you and me okay?” before telling him to set up a BetFair account in someone else’s name. “I have a very high profile jockey that will have some very short priced losers for us to lay,” Edward wrote. “But no one else can know other than us, that’s very important.” He was found guilty and fined over two lesser offences, and is banned from racing for two years for threatening a steward during an appeal hearing against a previous ban. John Hartman agreed during cross-examination that he had been part of the email exchange but said that the bribe had never taken place, adding that horses were animals so the outcome was not guaranteed. [SMH]

  • 01 Nov 2013 at 5:16 PM

Suspension Watch ’13: Barclays, UBS

A whole bunch of currency traders have been asked to take 5. Read more »

  • 20 Sep 2013 at 2:51 PM

UBS Whistleblower (Allegedly!) Likes His Drink

Remember Bradley Birkenfeld? Former UBS employee who scored himself a $104 million bonus from the IRS for single-handedly making the government’s case against UBS re: tax cheats, which resulted in the US scoring $780 million from the Swiss bank and in turn nearly $5 billion when you count the additional Americans who were inspired to “voluntarily disclose offshore accounts”? But not before he was sentenced to 40 months at Schuylkill Federal Correctional Institution, 32 of which he did before getting the rest lobbed off for good behavior? He’s been celebrating for the past year, and recently celebrating a little too much. Read more »

In the heat of the moment, though, the only appropriate thing to do seemed to be to walk back to the club and punch the guy in the side of the head. In retrospect, he understands how that was probably a slightly disproportionate response. Read more »

  • 12 Sep 2013 at 2:47 PM

People Moves ’13: Morgan Stanley

The House of Gorman has lost some good men to UBS. Read more »

The SEC settled a little crisis-era CDO fraud case with UBS today and the fraud is pretty entertainingly shitty. Basically UBS provided the warehouse for a synthetic CDO where the notorious ACA was the collateral manager, and the disclosed deal was that, when the CDO closed, it would enter into (as protection seller) any CDS contracts that UBS had entered as part of the warehouse at (1) the market price of those CDS or (2) the price UBS had received for them as initial counterparty, whichever was more favorable to UBS.1 Now right there you’ve got some optionality and room for fuzziness, and you could imagine various unpleasant schemes where, for instance, UBS cherry-picks some contracts to transfer at market and some at historic price, or where UBS mis-marks some contracts to get a better deal when it transfers them.

But the actual scheme was simpler and dumber: Read more »

UBS is selling its over-the-counter commodity derivatives portfolio to JPMorgan, prompting John Carney to say this:

Here’s a good rule of thumb. When one bank buys a business from another bank, it’s almost always a case of regulatory arbitrage. It’s never really because of synergies or managerial talent or whatever other hokum the media relations churn out to their willing dupes in the press. It’s just about one bank being better able to take advantage of the rules.

So even though the rationale for JPMorgan Chase buying the over-the-counter commodities derivatives business of UBS remains mysterious, you can safely surmise this is regulatory arbitrage. Most likely, it’s got to do with capital requirements.

Umm maybe? I don’t know, this question seems a little over-determined; the thing is that pretty much everyone thinks that (1) JPMorgan is pretty good at running an investment bank, the occasional hiccup aside, and that (2) UBS is pretty crap at doing so. So are US regulators relatively more comfortable with JPM managing this portfolio than Swiss regulators are with UBS doing so? Sure, probably, but probably so are the respective shareholders, and counterparties, and senior managements, and anyone else you might ask. Really moving any portfolio of anything from UBS to JPMorgan is probably Pareto optimal.

The light irony comes from – well here is Bloomberg’s first sentence: Read more »