BERN: UBS is to pay combined fines of $545 million (CHF511.4 million) to conclude currency investigations by the United States authorities. The bank announced on Wednesday that the settlement includes a guilty plea over the rigging of Libor benchmark interest rates.
The penalty breaks down into a $342 million payment for the Swiss bank to the Federal Reserve for foreign exchange misconduct. $203 million in fines is due to UBS’s forex activities breaching a previous deal made with the US over the rigging of the London interbank offered rate, Libor. This agreement was dependent on the bank adhering to US laws and staying out of trouble with the US authorities for two years. The deal was struck in 2012, and forex investigations started less than a year later, resulting in the non-prosecution status being scrapped.
The move signifies a tough stance by the authorities. It is the first instance of the US justice department going back on a non-prosecution agreement in a banking case. UBS had hoped for a different outcome, as it was the bank which had alerted the department to the market manipulation. It is also now in a three-year probation period with the justice department.
