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Subscribe to RSSZURICH - Swiss bank UBS was hit with a $1.5 billion fine on Wednesday, admitting to fraud, paying bribes to brokers and "pervasive" manipulation of global benchmark interest rates by dozens of staff in a deal with international authorities.
The penalty agreed with U.S., UK and Swiss regulators is more than three times the $450 million fine levied on Britain's Barclays in June, also for rigging the Libor benchmark rate used to price financial contracts around the globe.
It is the second-largest fine paid by a bank and comes a week after Britain's HSBC agreed to pay the biggest ever penalty - $1.92 billion - to settle a probe in the United States into laundering money for drug cartels.
Michael Buholzer / Reuters
A logo of Swiss bank UBS is seen on a building in Zurich.
'Unethical behavior'
The revelations are another blow to UBS, which has had a tough 18 months after suffering a $2.3 billion loss in a rogue trading scandal, management upheaval and thousands of job cuts.
"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity," UBS Chief Executive Sergio Ermotti said in a statement disclosing the extent of the wrongdoing, which took place over six years from 2005 to 2010.
UBS said it will pay $1.2 billion to the U.S. Department of Justice (DoJ) and the Commodity Futures Trading Commission (CFTC), 160 million pounds to the UK's Financial Services Authority and 59 million Swiss francs from its estimated profit to Swiss regulator Finma.
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"The core thing is it compares very poorly with Barclays' fine as it's three times the scale. It suggests there's more egregious behavior," said Chris Wheeler, analyst at Mediobanca in London
The bank said the fines would widen its fourth quarter net loss but said it would not need to raise new capital as a result and traders said the fines were largely priced into the bank's shares, which were expected to open slightly higher in Zurich.
Britain's financial regulator said at least 45 people were involved in the rigging across three continents, which took place across a range of Libor currencies. It involved senior managers at UBS directing traders to keep Libor submissions low in order to give the impression that the bank was able to borrow more cheaply than it would actually have been able to do so.
The British FSA said that after August 2007, when the U.S. sub-prime crisis raised doubts about the financial health of banks, UBS told its staff to "protect our franchise in these sensitive markets".
The extent of the wrongdoing was highlighted in documents released by the FSA which showed that in January 2007, a trader asked a manager who supervised the submitter for Yen Libor and asked him to "...try to keep 6m and 3m libors up".
The manager responded: "standing order, sir".
The FSA said "the manipulation was conducted openly and was considered to be a normal and acceptable business practice by a large pool of individuals".
'Done ... for you big boy': How emails nailed Barclays
The Libor benchmarks are used for trillions of dollars worth of loans around the world, ranging from home loans to credit cards to complex derivatives.
Tiny shifts in the rate, compiled from daily polls of bankers, could benefit banks by millions of dollars. But every dollar a bank benefited meant an equal loss by a bank, hedge fund or other investor on the other side of the trade - raising the threat of a raft of civil lawsuits.
In a memo to staff on Wednesday, Ermotti said it was too early to determine whether or how clients were affected, pending further regulatory probing of the rate fixing.
The steep fine for UBS is despite the bank, since 2011, cooperating with law-enforcement agencies in their probes. The bank said it received conditional immunity from some regulators.
A similar admission by Barclays in June touched off a political firestorm that forced its chairman and chief executive to quit. Ermotti said around 40 people had left UBS or been asked to leave the bank as a result of the investigation.
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$1.5 Billion is petty cash to this crowd, I want to see these SOB's do the perp walk, along with 50% of Wall Street and Bernake,Paulson,Geitner et-al who made $billions while our economy went down the crapper and were then hired by our so-called "Socialist" President to oversee our financial recovery when they were hugely culpable and profited in our melt-down. Foxes guarding the hen house does not even come close.
Who needs the terrorist groups when Wall Street and the Mega banks have done more damage to our country than any crazy rag-heads or even the horrific 9/11 attack , wake up America, keep blaming Mexicans and Welfare Queens while our revered "Parliament of whores" (both parties) are more interested in getting re-elected so they can continue sticking their snouts in the pork barrel while we squabble over trivialities our Republic is being hi-jacked by big money, keep watching Faux News and DWTS you morons, you deserved to get screwed unless you wake the h*ll up !!!!!!
People aren't watching Faux News, they are watching Dancing with the Stars and three hours of The Voice. Most Americans couldn't care less about politics, whether Fox of NBC. They are too busy consuming to notice they are next in line to get robbed.
$1-2B is literally change in their pockets. They are getting a punishment which can't even called a slap on the wrist.
The bank identified 45 people responsible, why are they not in jail? Why do they never go to jail?
There is one law for big corporate crime, and a much harsher law for the rest of us.
I appreciate your honesty. We all need a HUGE dose of it and to open our eyes and get completely informed on how "the system" works - AGAINST US! However, I could do without the generality and racist tone made against an entire sector of the world's population. There are bad, bad people in every region and religion of this planet. Manson, McVeigh and Lanza were not "rag-heads".
Two have exscaped: http://usnews.nbcnews.com/_news/2012/12/19/16010251-bank-robbers-use-rope-made-of-cloth-scraps-to-escape-chicago-jail?lite
This is a 5 year crime and $250k fine. How does that work, if you steal more you just get a fine? A fine you don't pay your self but make your investors pay?
Hello folks, the banksters frauds is almost a daily occurrence anymore and the sheeple merrily line up to get fleeced without even a whimper, that is what is truly sad! The bankster frauds also expose other areas of malfeasance that go without notice by the sheeple.
The “drug war” is a joke! Recently HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Assistant Attorney General Lanny Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a financial settlement of $1.9 billion which as one analyst noted is about five weeks of income for the bank, a drop in the bucket compared to the hidden profits they made laundering the money over the years.
The banks’ laundering transactions were so brazen Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”
Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. If this doesn't let you know there is a double standard for the rich I don't know what it will take to wake the sheeple up!
The New York Times put it this way:
“Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system.”
Are you fricking kidding me, too big to fail and too big to jail! The Banksters can do no wrong but in Brooklyn alone every year 50,000 people are arrested for marijuana possession or paraphernalia and are put into jail or pay large fines.
If you can’t see what is wrong with this picture you may want to check your pulse. When you decide not to prosecute bankers for billion-dollar crimes connected to drug-dealing and terrorism (some of HSBC’s Saudi and Bangladeshi clients had terrorist ties, according to a Senate investigation), it doesn’t protect the banking system, it does exactly the opposite.
The drug laundering has been going on for quite awhile so what should their real fine be?
How about all of it? How about every last dollar the bank has made since it started its illegal activity? How about you dive into every bank account of every single executive involved in this mess and take every last bonus dollar they’ve ever earned? Then take their houses, their cars, the paintings they bought at Sotheby’s auctions, the clothes in their closets, the loose change in the jars on their kitchen counters, every last freaking thing. Take it all and don’t think twice. And then throw them in jail.
Sound harsh? It does, doesn’t it? The only problem is, that’s exactly what the government does just about every day to ordinary people involved in ordinary drug cases.
An international drug trafficker is a criminal and usually a murderer; the drug addict walking the street is one of his victims. But thanks to Breuer, we’re now in the business, officially, of jailing the victims and enabling the criminals. When people steal from banks they go to jail, when banks steal from people they get bonuses.
If this surprises you it shouldn’t. Ever since the British East India Company, the world’s governments have been fighting to control the drug trade from each other.
The top down executives waltz off into the future with overloaded pockets of ill gotten gains again with no threat of jail time. Talk about robber barons. You know who is really going to pay.
People that don't like regulation of industries need to thing about this: every competitive sport is regulated yet there are multiple penalties called every game. If competitive people are willing to bend or break rules while they are being watched by refs, linesmen, slow mo cameras and millions of fans, just imagine what competitive people are willing to do when they are not being watched.
Similarly, no one can say that regulation makes sports less competitive, so that argument is stupid when talking about regulations on industries.
They still profited massively from the fraud, even after paying the fine.
The only crime here, in the eyes of the
mafia bossU.S. authorities, was failing to give the boss his cut.If you committed the same crimes, you would be in jail.
Hell, someone just got 10 years for hacking some celebrities' vacuous emails. By that measure, these bankers should be jailed for a few centuries.
$1.5 Billion....just a drop in the bucket. They made off the majoriey of it.
They made Trillions. & Trillions.. but only fined a fraction of what they made.. and are still allowed to conduct business as usual? The fine should be everything they have in assets, the company should be scuttled, closed.. The bankers, brokers, traders.. jailed ! How many millions of lives were effected because of their business as usual practices.
Bankers = Evil
There should be a "Zero Tolerance" law. Take their licence away and DON'T let them operate in the USA.
How about take away their right to freely move beyond their 20x10?
Jail?
As stated yesterday the pen has stolen more than the sword. Keep pushing for the gun ban, the Indians turned in theirs and look how well that turned out.
Bingo!
One Pen protects the other Pen while the Mere Mortals get the shaft.
These fines will do nothing for the countless people hurt by just the collateral damage alone. Lost savings, lost homes, destroyed value of currency, prosperity lost for decades. The saddest part is very few BANKSTERS will ever see the inside of a Prison Cell, while lesser mortals go to prison for minor infractions.
These Suits have done more damage with the stroke of a pen then any Driver can with a bus.
What the world needs more then anything is a Major Task Force on White Collar Crime that won't go anywhere in a year or two but be around forever. All these BANKSTERS need to be brought to Justice, pay full damages and be made an example of so this crap doesn't darken our doorstep again for a very long time.
The sadder part is that most politicians run cover for these suits all the time just to be rewarded handsomely for their protection at a latter date.
Bingo back at you!
Curious as to what they're teaching our kids in schools these days about the 3 branches of government and the checks and balances they provide. We should be educating our students AND THE PUBLIC about the truth of the situation. We are a lawless, corrupt society. Teaching anything else puts us on parallel with the Chinese, and the methods they use to propagandize. Bankers, politicians and other "one-percent-ers" are thieves and criminals. They have hijacked our country and must be brought to pay for their crimes. We must educate people to help them understand that their parents are anti-American, treasonous slime. Once these people are recognized in society, and by their "loved" ones, as the pariah that they are, things will begin to change. When the 99% comes together to demand that these criminals go to jail, things will begin to change. We have the power to explore and implement unique ways to bring them down. It should be obvious to us by this point that they don't care if our country implodes.
New item: Some of us do care, enough to do something about the wrecking ball that is being taken to our country. The 99% must come together. The power to bring positive, peaceful change to this country is in our hands.
The longer they can keep Mere Mortals at each others throats, the longer they can keep fleecing them.
The financial services (banks, brokerages, etc,) are the modern-day version of the mafia - a band of arrogant criminals who, just like the mafia, own the politicians and the legal system. Just like the mafia, they pay off the cops to let them go on their way. It is also kind of a odd that the big honchos are from the most developed, mostly white, so-called democracies of the world - U.S., Britain, and Switzerland. (I guess the Italians just couldn't compete!) There is not much hope for correcting the situation when the cabal is led by the worlds only super-power. I guess you would have to be led by the only super-power in order to get away with such a massive crime against humanity.
And the music goes on. When this all came out in the news there were, and still are, many other banks under investigation. Now go get JP Morgan, BofA and Citi. These people are the enemy and always have been. Their actions have brought pain and suffering to every able bodied, hard working person on this planet. Society lost the hand without the option of folding. Gone are our homes, jobs, savings, dignity and our dreams of a normal happy life. And yet not one of the scum bags will ever seen the inside of a jail. Pathetic!!!
$1.5 billion fine is outrageous. No government, no anything should ever be allowed to get away with such outrageous power. They should be in jail for what they do .
In the meantime a poor guy who get caught smoking marijuana is sent to jail for 2 years and bankers who destroyed people lives making money pay a fine of $1.5 out of 20 to $50 Billions profits they made. Welcome in the 21st century where corporations are people until the time they have to face a court of law. What was on TV Tonight?
The fine is not enough. The bank should no longer be allowed by law to do any business connected with the USA. Put a company out of business and others will see what happens when you mess with US citizens. The fine is being paid by the USB profits from illegal business practices that have probably been going on for years and only now they got caught. Banking outside of this country (Caymens,etc.) should be illegal under our laws.
Unfortunately Our American Banks are under investigation for their hand in this scam also.
This is one of the many ways the thieving rich get richer. Very few ever got rich by hard work.
If they're working hard at all it's their laser-like focus and drive to manipulate others into giving away their hard-earned $$.
The bank identified 45 people responsible, why are they not in jail? Why do they never go to jail?
There is one law for big corporate crime, and a much harsher law for the rest of us.
ED, the coroporation was tried and found guilty and paid a fine. Going after corporate crime is the wrong approach. Contrary to right wing dogma, corporations are not people because you can't throw corporations in jail. All you can hurt is the shareholders. We need to prosecute and send to prison the PEOPLE who commit these crimes.
The lessons here is that crime does indeed pay and pay handsomely. Wall Street, Banking, keeps raping and pillaging and getting away with disgusting and illegal acts. Yet government is just as bad for not prosecuting the people who committed these crimes and their institutions. As someone said above, I want to see these people do the perp walk of shame, be tried, and committed to jail.
If I go 11 miles over the speed limit and get a ticket, I have to appear in court. I feel shame for speeding, and suffer the consequences.
These people don't even appear in court. There's no shame. There's no *consequence*.
The bankers and their stockholders had the fine priced into the share price according to the article. The lesson here is that crime does pay, and pay handsomely.
We should be ashamed of our DOJ, SEC, and our government for continually allowing these corporate "citizens" to break the law and do no crime. Without serious legal consequences, there will be no behavioral changes. They didn't even hit them hard enough in the pocket book to make them feel pain.
What a disgusting period this is for Main Street. What a wonderful time it is to be a banker! Free money from Bernanke and the SEC and DOJ turn the other check while pocketing a pittance in penalties.
Shame!
Something fundamental has changed. As I recall, Swiss banks were always secretive because they guaranteed anonymity for secret account holders...and nobody outside of Switzerland could do anything about it.
Now we got a committee of international jurists who can just levy a fine against a Swiss Bank.
There have been a few of these extra national things... like the cooperation in shutting down wikileaks.
Things are different.
Once again, heavy fines, but no one is getting arrested. The only way it's going to stop is to put these guys in jail for a long time so the next set of managers won't repeat it.
This is pathetic. It's why crooks still rule the banking industry. Putting a big fine on a bank only hurts the shareholders. The crooks that committed the fraud walk away laughing because they outsmarted the small people once more. These crooks should be posecuted as individuals and thrown in prison if found guilty. It is the only thing they will understand.
God is a faith! Not a real person! The shooter is real and had several real guns and real bullets!
The way I hear it, is that we need LESS regulation, the free market is self regulating, or some BS like that.
WOW! It seems everyone here is in agreemt that those responsible need to be singled out, prosecuted to the full intent of the laws, and prohibited from ever working or operating in any financial instituion again. Corps aren't people? Bu.. .hit. The corps can turn these perpretators in, and let them fend for themselves along with all the rest of us that break laws.
These instutions deliberately robbed millions of us around the world of many $ trillions. As a "civilized" society, we need to find ways to hold them accountable and repay every cent illegally earned.
.....and I couldn't agree more with PlzThink. How can we band together to force Washington, Wall Street and all of the To big to fail banks that we want and will get justice.