Skip to main content

UBS Has Come Up With A Two-Step Process For Rate Rigging

  • Author:
  • Updated:

Back in November, UBS worked out a prettay, prettay, prettay sweet deal for itself re: Libor manipulation. Like many another bank, UBS's employees had their way with London Interbank Offered Rate. Unlike many other bank, which faced stiff penalties for doing so, the Swiss struck an immunity deal with the EU wherein it paid a relatively small fine and then, in exchange for cooperating with authorities and "turning over information about other banks," found itself in the clear. Anyway, that worked out so well for UBS last time that it's decided to take the same approach with a new rate-rigging investigation, and save itself a coupla bucks.

trying to reprise its success in limiting fines in a probe of interest-rate rigging, is seeking immunity in the U.S. and European Union as part of the global investigation of currency markets, two people with knowledge of the case said. UBS saved itself billions of euros in fines in December by disclosing to the EU its role in manipulating the London Interbank offered rate. Now, the bank aims to be the first to report its own conduct in currency markets to European and American regulators, said the people, who requested anonymity because the matter isn’t public.

The Zurich-based bank is making its bid for leniency as at least a dozen regulators probe allegations that traders colluded to rig benchmarks in the $5.3 trillion-a-day currency market. The world’s biggest banks are under scrutiny, and at least 21 people have been fired or suspended as a result. “They’ve been through the drill and understand the benefits of cooperation,” said Douglas Tween, a lawyer at Baker & McKenzie LLP and a former Justice Department attorney.

Obviously, this is the new way of doing things around the bank; up and just not engaging in fraud at all would be biting off more than everyone could chew and, frankly, unrealistic. To recap, it's 1. Manipulate foreign exchange rate and then 2. Race to beat everyone else who might want to cooperate, be of some use to regulators, limit that fine. Look out for a section on all of this in subsequent editions of the company handbook and in the meantime, a memo will be circulated with various phone numbers to call based on specific rate rigging so that employees can take it upon themselves to speed up the process by, for example, screwing with the fed overnight rate and the immediately, like, seconds after they push the button, picking up the phone and reporting themselves.

UBS Said to Seek Immunity in FX-Rigging Probes by EU, US [Bloomberg]