The U.S. Justice Department has formally filed charges against two former UBS AG traders for their involvement in manipulating Libor interest rates for the purpose of increasing profits for the bank. The charges against Tom Alexander, William Hayes and Roger Darin come on the heels of a $1.5 billion settlement between UBS and the governments of the United States, the United Kingdom and Switzerland. The UBS settlement follows Barclays PLC’s admission in June 2012 that it manipulated Libor rates in an effort to bolster a positive financial outlook during the global financial crisis. Barclays ultimately agreed to pay more than $450 million to settle all charges related to its involvement in the Libor scandal.
Hayes and Darin will both face charges of conspiracy, and Hayes will also face charges of price fixing and wire fraud. The U.S. government is currently seeking extradition of the men to face the charges, which include allegations that Hayes and Darin “conspired with others known and unknown within UBS to cause the bank to make false and misleading yen Libor submissions to the British Bankers’ Association.”
During their investigations, regulators discovered more than 2,000 instances where UBS had requested other banks and brokers to manipulate rates. U.S. Assistant Attorney General Lanny Breuer stated that “for UBS traders, the manipulation of Libor was about getting rich.” More than 45 bank employees, some in managerial positions, were aware of the widespread rate manipulation scheme, and more than 30 individuals have left the bank as a result of the investigation into wrongdoing.