UBS Nears a Settlement Over Libor-Rigging

4798UBS AG (UBSN), Switzerland's biggest lender, is close to agreements with U.S. and U.K. regulators to pay more than 290 million pounds ($466 million) in fines over allegations traders tried to rig global interest rates, a person with knowledge of the talks said.

Regulators claim UBS traders colluded with other banks to influence rates in an effort to increase profits. Photographer: Chris Ratcliffe/Bloomberg
An announcement may come as soon as next week, said the person, who declined to be identified because the talks are private. More than 25 people have already left UBS after the lender's own internal probe, another person said last month.

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders' finances appear healthier. UBS's fine may surpass the record 290 million pounds Barclays Plc (BARC), the U.K.'s second-biggest bank, paid in June to settle claims it attempted to manipulate Libor.

"UBS has been cooperating fully with the regulatory and enforcement authorities in connection with Libor investigations," Mark Panday, a Hong Kong-based spokesman at the Zurich-based lender, said in an e-mail. "As we are in the midst of discussions with those authorities, we cannot comment further."

U.K. Prosecutors
Regulators are focusing on whether UBS traders colluded with other banks to influence rates in an effort to increase profit, the person said. U.S. authorities want to seal a deal with the Zurich-based bank by the end of the month, though the discussions could continue into next year or break down, according to the New York Times, which reported the discussions earlier today citing unidentified officials.

Steve Adamske, a spokesman for the Commodity Futures Trading Commission, and officials at the U.K. Financial Services Authority declined to comment on the New York Times report. The U.S. Justice Department also declined to comment, according to the newspaper.

U.K. prosecutors are poised to arrest former traders and rate setters at UBS for questioning over their role in the Libor scandal, a person with knowledge of the probe said last month. The Serious Fraud Office, which is conducting a criminal probe in parallel with the DOJ's fraud division, is focusing on e- mails between traders at UBS and other banks.


Source: BusinessWeek | Lindsay Fortado
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