UBS to pay $1.5-bn fine in rate rigging case
Swiss bank UBS swallowed a $1.5 billion fine and admitted to fraud today after a global probe revealed its staff orchestrated the manipulation of benchmark interest rates over three continents.business Updated: Dec 19, 2012 22:45 IST
Swiss bank UBS swallowed a $1.5 billion fine and admitted to fraud on Wednesday after a global probe revealed its staff orchestrated the manipulation of benchmark interest rates over three continents.
UBS traders colluded with brokers to rig the Libor rate, which is used to price trillions of dollars worth of loans worldwide, rewarding them for their help. They also teamed up with traders at other banks.
The revelations are yet another blow for UBS, which over the past 18 months has lost $2.3 billion in a rogue trading scandal, suffered management upheaval and thousands of job cuts.
The penalty agreed with US UK and Swiss authorities is more than three times the $450 million fine levied on Britain's Barclays in June also for rigging Libor, and is the second-largest fine ever levied on a bank.
Shares in the Swiss bank rose 1.6% to hit a 17-month high of 15.5 francs ($16.97)in early trade as dealers said the settlement, which was expected, removed a major uncertainty.
The UBS fine comes a week after Britain's HSBC agreed to pay the biggest ever bank penalty - $1.92 billion - to settle a probe in the US into laundering money for drug cartels.