According to a source with knowledge about the matter revealed that the U.S. prosecutors are their way to file charges against several bankers associated with UBS AG (USA) (NYSE: UBS) to support Tokyo interbank rates. The charges would be alleged by the United States Department of Justice against all the individuals involved in the manipulation of the offered London interbank rate also called LIBOR along with the manipulation of lending rates across Japan and Europe.
The prosecution is estimated to start with an announcement, as per which UBS AG (USA) (NYSE: UBS) Securities Japan Limited, the Zurich based bank’s Japanese unit, accused of manipulating the interest rates since 2007 will plead guilty, a person said on condition of anonymity. UBS AG (USA) (NYSE: UBS) has agreed to pay over $1 billion to settle all the allegations associated with interest rate manipulation to the Justice Department, the Swiss Financial Market Supervisory Authority and Financial Services Authority of U.K, revealed sources close to the matter.
The $1 billion sum was more than two times $469 million paid by Barclays PLC (ADR) (NYSE: BCS) last June for settling down the charges that employees of the bank were involved in a conspiracy to manipulate LIBOR, used for borrowing amongst banks. A spokeswoman from UBS AG (USA) (NYSE: UBS), Karina Byrne quoted her email that they are continually working with numerous regulatory authorities for resolving the matters regarding interest rates of LIBOR, which is a global benchmark. She refused to comment further.
The Justice Department did not require Barclays PLC (ADR) (NYSE: BCS) unlike UBS AG (USA) (NYSE: UBS) to first plead guilty in the matter that came up Last June. In contrast they appreciated the Barclays PLC (ADR) (NYSE: BCS) for the voluntary and complete disclosure of all facts regarding the conspiracy known to them on time. According to the Swiss bank’s most recent annual report, UBS AG (USA) (NYSE: UBS) has been promised conditional immunity by the antitrust division of the Justice department.
Adhering to Justice Department guidelines, an organization can secure favorable treatment from prosecutors on the condition of being the first to pledge full cooperation for allegations that comes under antitrust investigation. The organization has to first admit that it was a part of an antitrust conspiracy, and has to give its full support in helping the agency’s identity the other participants of the same.
The Japanese regulators approved UBS AG (USA) (NYSE:UBS) Japan based operations over a year ago, keeping in mind its shortcomings to be a part of the Tokyo interbank market for a week and asked the bank to improve the compliance and practice strict control internally. A source disclosed that a former trader of the Citigroup Inc. (NYSE:C) Was detained as part of the arrests in the U.K. for the global probes related to LIBOR early this week.
Serious Fraud Office and London city police worked in close co-ordination with each other to arrest Thomas Hayes, who is a former trader for both UBS AG (USA) (NYSE:UBS) and Citigroup Inc. (NYSE:C). Besides his arrest, two other people named Terry Farr and Jim Gilmour working at RP Martin Holdings Ltd. Which, is a brokerage firm were arrested too. However, they were released on bail.
Shares of UBS AG (USA) (NYSE:UBS) are at 16.35$
Shares of Citigroup Inc. (NYSE:C) are at 37.60$
Shares of Barclays PLC (ADR) (NYSE:BCS) are at 16.50$
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