What a Swiss Mess.
UBS, Switzerland’s largest bank, is set to be whacked with as much as a $1 billion fine over its role in a massive global interest- rate rigging scam.
The fine, which could be announced as soon as next week as regulators and bank brass hammer out the details of the case, will be levied by a tag team of international regulators — the Commodity Futures Trading Commission, the UK’s Financial Services Authority, the US Justice Department and the Swiss Financial Market Supervisory Authority, sources said.
The UBS fine would dwarf the $470 million settlement entered into by Barclays earlier this year over its role in the same Libor scandal.
Libor, or the London interbank offered rate, is used to set interest rates on many types of loans around the world.
The fat fine comes a month after UBS rogue trader Kweku Adoboli was convicted in a London court of fraud and sentenced to seven years in prison related to a $2 billion trading loss at the Zurich-based firm.
The loss led to CEO Oswald Grubel losing his job.
The bank is in the process of slashing some 10,000 jobs and restructuring its investment banking platform.
A spokeswoman for UBS declined to comment other than to confirm its ongoing discussions with regulators.
The CFTC will account for the lion’s share of the fine, sources said, while the Swiss authority will be the least onerous in dollar terms.
Rate-rigging at UBS is believed to be linked to dozens of mid-tier executives — one reason that the fines are higher than Barclays, where fewer execs were fingered.
One former UBS official, rates trader Tom Hayes, was arrested by UK’s Serious Fraud Office on allegations tied to Libor rate-rigging along with two other traders from other firms earlier in the week.
Royal Bank of Scotland and other US banks, including Citigroup and JPMorgan Chase, are also in talks with regulators over their roles in the Libor scandal.