Dec. 19 - The U.S. government, along with European authorities, slapped a record $1.5 billion fine on Swiss bank UBS and announced criminal charges for two ex-UBS bankers for manipulating a key global lending rate. Conway G. Gittens reports.
U.S. Attorney General Eric Holder lays out the record $1.5 billion penalty for UBS, which admitted a Japanese unit manipulated a key lending rate known as the London InterBank Offered Rate or Libor. SOUNDBITE: U.S. ATTORNEY GENERAL ERIC HOLDER (ENGLISH) SAYING: "UBS AG, the parent company of UBS Japan, has agreed to pay a penalty of $400 million to the United States government to admit and accept responsibility for its misconduct and to continue cooperating with the department's ongoing investigation as part of a non-prosecution agreement. Combined with roughly $1 billion in regulatory penalties and disgorgement these criminal fines and penalties bring today's total resolution to approximately $1.5 billion." UBS admits dozens of its staff manipulated the Libor rate - used to set interest rates for everything from mortgages to student loans to credit cards and other financial products around the world. A stiff company fine is only part of the resolution, says Holder. SOUNDBITE: U.S. ATTORNEY GENERAL ERIC HOLDER (ENGLISH) SAYING: "Additionally in a separate complaint, two former UBS traders have been charged with conspiracy for their alleged role in this scheme, which allowed UBS to boost its trading profits by placing bets on the movement of benchmark interest rates, then manipulating those rates. One of these individuals have also been charged with wire fraud and an anti-trust violation in connection with these activities." The dollar penalty and subsequent arrests are in conjunction with British and Swiss authorities, all cooperating in the growing probe engulfing major banks on both sides of Atlantic.