UBS Close to Settlement on Libor Rigging

Bank said to pay more than $465 mln to settle allegations.

UBS AG, Switzerland’s biggest lender, is close to agreements with regulators to pay more than 290 million pounds ($465 million) to settle allegations traders tried to rig global interest rates, a person with knowledge of the talks said.

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 benchmark such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. UBS’s is fine is likely to surpass the 290 million pounds Barclays Plc, 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.”

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 Times report. The U.S. Justice Department declined to comment, the newspaper said.

U.K. prosecutors are poised to arrest former traders and rate setters at UBS, Royal Bank of Scotland Group Plc and Barclays for questioning over their role in the Libor scandal, a person with knowledge of the probe said last month.

Libor, a benchmark for more than $300 trillion of financial products worldwide, is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. The rates help determine borrowing costs for everything from mortgages to student loans.


Bloomberg News

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