By agreeing to the settlement, UBS also acknowledges that several dozen traders, managers, and senior managers tried to manipulate multiple rates, including the Yen Libor, Euribor, and 4 currencies of the Libor index. Their subsidiary in Japan will plead guilty to one felony charge in the U.S.
This from multiple media reports. See especially the Wall Street Journal article, UBS to Pay $1.5 Billion to Settle Libor Charges (behind paywall).
One obscure part of the story may turn out to be the biggest – there may be individual prosecutions in the near future
Update: The U.S. Justice Department has unsealed formal charges against two former UBS employees. You can read multiple news reports, but can start at the WSJ’s Two Former UBS Traders Charged in Libor Probe, which says:
The former traders, … , who lives in England, and … a resident of Switzerland, were both charged with conspiracy, the Justice Department said.
Mr. … was also charged with wire fraud and price fixing.
A quick summary from the WSJ:
As part of the deal, UBS acknowledged that dozens of its employees were involved in widespread efforts to manipulate the London interbank offered rate, or Libor, as well as other benchmark rates, which together serve as the basis for interest rates on hundreds of trillions of dollars of financial contracts around the world. UBS’s unit in Japan, where much of the attempted manipulation took place, pleaded guilty to one U.S. count of fraud
The British regulator, Financial Services Authority, was able to specifically identify over 2,000 attempts to manipulate the rate with knowledge and involvement of at least 45 traders and managers.
UBS settles LIBOR manipulation claims for $1.5B and one guilty plea. Looks like some individual prosecutions may follow.Read More »