LONDON — The Swiss bank UBS said on Wednesday that it would pay more than $500 million in fines to the authorities in the United States for its role in the manipulation of currency markets and benchmark interest rates.
UBS said it would not face a criminal charge over currency misconduct but would be required to separately plead guilty to a criminal charge for its prior conduct over the manipulation of the interest rates, including theLondon interbank offered rate, or Libor, after the Justice Department tore up a 2012 nonprosecution agreement.
The agreement with UBS resolves a series of investigations by the Justice Department and other authorities in the United States, including banking regulators in Connecticut, into manipulation of currencies.
“The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions,” Axel A. Weber, the UBS chairman, and Sergio P. Ermotti, the UBS chief executive, said in a news release.
“We made significant investments to strengthen our control framework and compliance programs,” they said. “We self-detected this matter and reported it to the U.S. Department of Justice and other authorities. Our actions demonstrate our determination to pursue a policy of zero tolerance for misconduct and a desire to promote the right culture in our industry.”
UBS was among a group of the world’s largest banks that paid a combined $4.25 billion in November to settle with British and Swiss regulators and the Commodity Futures Trading Commission of the United States for their role in manipulating foreign currency markets.
As part of its latest agreement with the American authorities, UBS will pay a penalty of $342 million to the Federal Reserve related to the foreign currency investigation, but will receive conditional immunity from prosecution by the Justice Department’s antitrust division. UBS said this reflected its role as the firm that first reported potential misconduct to the Justice Department.
The Fed and the Connecticut Department of Banking will also jointly issue a cease-and-desist order finding that UBS engaged in “unsafe and unsound business practices” relating to its currency trading business, UBS said.
In December 2012, UBS agreed to pay a combined $1.5 billion to the authorities in the United States, Britain and Switzerland for its role in a multiyear scheme to manipulate benchmark interest rates.
As part of its prior settlement, the bank’s Japanese subsidiary pleaded guilty to a criminal charge of wire fraud in the United States, but the parent company was allowed to enter a nonprosecution agreement as a result of its cooperation in the Libor investigation.
The agreement was set to run for two years and called for UBS to avoid prosecution if it did not commit any “United States crime whatsoever,” if it continued to cooperate with the continuing Libor investigation and if it came forward with information about potential misconduct by the bank or its employees.
Because its conduct violated that agreement, UBS will plead guilty to a criminal charge of wire fraud in the Libor matter, pay a $203 million fine and accept a three-year term of probation.
An earlier version of this article misstated the amount UBS agreed to pay to the authorities in the United States, Britain and Switzerland in December 2012. It was $1.5 billion, not $1.5 million.
Source: The New York Times