UBS AG (USA) TO PAY 1.6 BILLION IN LIBOR CASE- C, BCS, & UBS

After charges being brought by the US Department of Justice against individuals for manipulating the London interbank rate, the U.S prosecutors are planning to charge several bankers associated with the UBS AG (NYSE:UBS) for manipulating the Tokyo interbank rate.

The prosecution is going to begin with the UBS AG (NYSE:UBS)’s Japan unit to plead guilty of manipulating the Japanese interbank rate that they started doing in 2007. The penalty of $ 1.6 billion being levied on UBS AG (NYSE:UBS) will be announced by Dec18th. The settlement figure of $1.6billion is three times of the $469million paid by Barclays Plc. ADR (NYSE:BCS) paid last June. The differential treatment meted out to UBS AG (NYSE:UBS) is because the Department of Justice appreciated Barclay’s timely, voluntary and complete disclosure of facts and hence did not ask Barclays Plc. ADR (NYSE:BCS) to plead guilty of any charges.

However ,UBS AG (NYSE:UBS) has been granted conditional immunity in this case. According to DOJ’s guidelines, a corporation can get favorable treatment if the corporation pledges complete cooperation in an antitrust investigation. The corporation must admit to being part of the conspiracy and should identify the other participants.

However there have been no official comments on the settlement amount by any regulating agency. UBS AG(NYSE:UBS) spokeswoman, Karina Byrne, did agree that they were in negotiations with authorities and would cooperate with them to resolve this issue relating to global lending rates.

A year ago, the Japanese regulators barred UBS AG (NYSE:UBS) from the Tokyo interbank derivative market and ordered the bank to improve its compliance and internal controls.

Last week the Serious Fraud office and London Police as part of a global Libor probe arrested Thomas Hayes, a trader at UBS AG (NYSE:UBS) and Citigroup Inc (NYSE:C). Two others arrested were employees of the brokerage firm RP Martin Holdings. The employees Terry Farr and Jim Gilmour were later released on bail

The UBS AG (USA) (NYSE:UBS) stock closed at $16.35. It was up 0.80%. The Citigroup Inc (NYSE:C) were up by 0.83% to close at $37.6. The shares of Barclays Plc. ADR (NYSE:BCS) went up by 1.29% to close at $16.5.

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Published by Benjamin Roussey

Benjamin Roussey is from Sacramento, California. He has two master’s degrees and served four years in the U.S. Navy. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship. His second master’s degree is an MBA in Global Management from the University of Phoenix (2006). He has worked for small businesses, public agencies, and large corporations. He has lived in Korea and Saudi Arabia where he was an ESL instructor. Benjamin spends his time in between Northern California and Cabo San Lucas, Mexico, committing himself to his craft of freelance and website writing. http://www.facebook.com/ben.rouss