UBS to pay $1 billion in Libor charges


This is a golden era of regulatory fines.

The sums have been staggering as of late, and HSBC recently got in on the act, agreeing to pay a whopping $1.9 billion to settle accusations multiple AML abuses. Now insiders are letting it be known that UBS has agreed to pay $1 billion to settle charges that it fraudulently sought to manipulate the Libor rate-setting process. That compares with the $450 million Barclays settlement over Libor manipulation charges.

According to media reports, an announcement is on track for perhaps as early as Monday. UBS's settlement will likely resolve investigations by the Department of Justice, the Commodity Futures Trading Commission, the UK Financial Services Authority and the Swiss regulator Finma. The CFTC took the lead in this investigation, according to the Financial Times

There's likely to be a lot of Libor settlement-related news soon. RBS has said it is actively in negotiations, and a settlement announcement could be in the near future. Several U.S. banks, including Bank of America, Citigroup and JPMorgan Chase, are under investigation as well. The probe involves ten regulatory authorities around the globe and about 20 banks and interdealer brokers. With the arrest of three former Barclays traders recently, the probes took a criminal turn. The private litigation looms as immense as well.

We'll most likely continue to see some huge settlements. UBS was hit with a massive settlement, even though it was cooperating with authorities, which makes the $1 billion even more ominous.  

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