UBS Pays £940m Penalty For Rate-Rigging

The Swiss bank UBS is to pay £940m, including £160m to regulators in Britain, to settle rate-rigging investigations.

The fines amount to the second biggest penalty paid by a bank in the wake of the £1.2bn money laundering settlement announced by HSBC in the US last week.

This case, which seems to have largely centred on the bank's activities in Japan, included manipulation of yen Libor and euroyen contracts.

The fines will go to regulators in the US, UK and Switzerland and the bank said it could not rule out further penalties in future.

The total comes to more than three times the $290m fine levied on Barclays in June for rigging the Libor benchmark rate used to price financial contracts around the globe from home loan rates to complex derivatives.

The Libor scandal cost Bob Diamond the top job at Barclays

UBS said today that around 40 people have left or been asked to leave the bank as a result of the Libor probe.

Its chief executive Sergio Ermotti added: "We deeply regret this inappropriate and unethical behaviour.

"No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity."

In a statement, the Financial Services Authority (FSA) said UBS made "corrupt payments" of £15,000 per quarter to brokers for at least 18 months to reward them for helping the Swiss bank manipulate global interest rates.

It said that at least 45 individuals including traders, managers and senior managers were involved in, or aware of, the practice.

The regulator recorded at least 2,000 requests for inappropriate submissions and said many more would have been made orally.

Tracey McDermott, FSA director of enforcement and financial crime, said: "They manipulated UBS's submissions in order to benefit their own positions and to protect UBS's reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor."

The FSA had already fined UBS £29.7m for failings which allowed a rogue trader to rack up losses of £1.4bn in an unrelated case.

Kweku Adoboli lost UBS £1.4bn

Kweku Adoboli was jailed for seven years in November after being found guilty of fraud.

The Libor scandal, which is expected to engulf other banks including RBS, has resulted in pledges to reform how the rates are set.

The British Banking Authority, which currently oversees Libor, has agreed to give up that responsibility as part of the changes.

A criminal investigation in the UK, led by the Serious Fraud Office, resulted in its first arrests last week,

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