Tag Archives: UBS

Big banks accused of interest rate-swap fixing in U.S. class action suit

NEW YORK (IFR/Reuters) – A class action lawsuit, filed Wednesday, accuses 10 of Wall Street’s biggest banks and two trading platforms of conspiring to limit competition in the $320 trillion market for interest rate swaps.

The class action lawsuit, filed in U.S. District Court in Manhattan, accuses Goldman Sachs Group, Bank of America Merrill Lynch, JPMorgan Chase, Citigroup, Credit Suisse Group, Barclays Plc, BNP Paribas SA, UBS, Deutsche Bank AG, and the Royal Bank of Scotland of colluding to prevent the trading of interest rate swaps on electronic exchanges, like the ones on which stocks are traded.

As a result, the lawsuit alleges, banks have successfully prevented new competition from non-banks in the lucrative market for dealing interest rate swaps, the world’s most commonly traded derivative.

The banks “have been able to extract billions of dollars in monopoly rents, year after year, from the class members in this case,” the lawsuit alleged.

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Hayes to Broker: UBS Management Ordered Staff to Lowball Libor

  • Tom Hayes discussed UBS Libor strategy with ICAP broker
  • UBS Told Libor Setters to `Err on the Low Side’ in 2007

The decision of UBS Group AG managers to lowball Libor submissions during the financial crisis was openly discussed by Tom Hayes and a broker accused of helping him rig the benchmark rate, according to e-mails presented in a London court.

When Darrell Read, a broker at ICAP Plc on trial in London, complained in 2007 that the rates were low, Hayes blamed the problem on managers that instructed employees to keep the benchmark down.

“It’s all senior management mate,” Hayes wrote back. “They want to show the world we’re the strongest bank.”

Read, 50, is one of six brokers from ICAP, Tullett Prebon Plc and RP Martin Holdings Ltd. on trial for conspiring to defraud by helping Hayes rig a version of the London interbank offered rate tied to the yen. Hayes, a former trader at UBS, was convicted of similar charges in August and was sentenced to 14 years in prison.

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UBS To Pay $33.5M Over Probes Of Puerto Rico Fund Sales

Law360, New York (September 29, 2015, 1:33 PM ET) — Wall Street regulators on Tuesday slammed a UBS affiliate in Puerto Rico with orders to pay $33.5 million to settle claims that it failed to supervise a representative who allegedly misled investors into using borrowed money to buy up closed-end bond funds offered by the broker-dealer.

According to the SEC, a representative for a UBS affiliate in Puerto Rico engaged in a $2.8 million scheme by misleading investors. (Credit: AP) Claims were brought by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority….

Source: Law360

SEC Charges UBS Puerto Rico and Two Individuals in Actions Relating to Former Broker’s Fraud

Washington D.C.–(Newsfile Corp. – September 29, 2015) – The Securities and Exchange Commission today charged UBS Financial Services Inc. of Puerto Rico and a former branch manager for failing to supervise a former broker who had customers invest in UBSPR affiliated mutual funds using money borrowed from a UBSPR affiliated bank.  UBSPR and the bank prohibited using such loans to purchase securities and the practice exposed investors to losses while producing profits for the former UBSPR broker, the SEC alleged.

UBSPR agreed to settle the SEC’s charges by paying $15 million in disgorgement, interest, and penalties, which will be placed into a fund for harmed investors.  The former branch officer, Ramiro L. Colon III, agreed to a settlement in which he will pay a $25,000 penalty and be suspended from a supervisory role for one year.

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‘Fugitive’ ex-UBS trader cannot escape U.S. case over Libor: judge

A former UBS AG (>> UBS AG) trader charged as part of a U.S. investigation into Libor rate manipulation lost a bid to have the case dismissed on Monday, with a federal judge ruling that a fugitive from U.S. justice had no right to mount a legal challenge.

U.S. District Judge Paul Crotty in Manhattan said Roger Darin, a Swiss citizen, was “flouting judicial process” by remaining in his home country to avoid arrest while sending lawyers to ask the judge to dismiss the case.

Darin’s lawyers argued he was not a fugitive since he had never fled, let alone appeared, in the United States since the U.S. Justice Department filed its criminal complaint in 2012.

But Crotty said his ruling was in line with “the realities of modern criminal prosecutions.”

Bruce Baird, Darin’s lawyer, in a statement said: “We think the judge misunderstood and misapplied the law, and we look forward to an appeal.”

A Justice Department spokesman did not respond to a request for comment.

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UBS Deal Shows Clinton’s Complicated Ties

Outlined in today’s Wall Street Journal:

A few weeks after Hillary Clinton was sworn in as secretary of state in early 2009, she was summoned to Geneva by her Swiss counterpart to discuss an urgent matter. The Internal Revenue Service was suing UBS AG to get the identities of Americans with secret accounts.

If the case proceeded, Switzerland’s largest bank would face an impossible choice: Violate Swiss secrecy laws by handing over the names, or refuse and face criminal charges in U.S. federal court.

Within months, Mrs. Clinton announced a tentative legal settlement—an unusual intervention by the top U.S. diplomat. UBS ultimately turned over information on 4,450 accounts, a fraction of the 52,000 sought by the IRS, an outcome that drew criticism from some lawmakers who wanted a more extensive crackdown.

From that point on, UBS’s engagement with the Clinton family’s charitable organization increased. Total donations by UBS to the Clinton Foundation grew from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014, according the foundation and the bank.

The bank also joined the Clinton Foundation to launch entrepreneurship and inner-city loan programs, through which it lent $32 million. And it paid former president Bill Clinton $1.5 million to participate in a series of question-and-answer sessions with UBS Wealth Management Chief Executive Bob McCann, making UBS his biggest single corporate source of speech income disclosed since he left the White House.

The UBS matter involved her helping solve a problem for a foreign bank—not a popular constituency among Democrats—and stepping into an area where government prosecutors had been taking the lead.


UBS officials deny any connection between the legal case and the foundation donations. “Any insinuation that any of our philanthropic or business initiatives stems from support received from any current or former government official is ludicrous and without merit,” a bank spokeswoman said. UBS said the speeches by Mr. Clinton and the donations were part of a program to respond to the 2008 economic downturn.

UBS’s troubles began in 2007 when an American banker working in Switzerland told the U.S. Justice Department that UBS had recruited thousands of U.S. customers seeking to avoid U.S. taxes. The disclosure led UBS to enter into a deferred-prosecution agreement with the Justice Department in 2009. The bank admitted to helping set up sham companies, creating phony paperwork and deceiving customs officials. It paid a $780 million fine and turned over the names of 250 account holders.

UBS has whistleblower deal in Brazil currency investigation

Swiss lender UBS AG made a whistleblower deal with Brazilian authorities investigating the suspected rigging of Brazil’s currency market and will receive no punishment in the case, a local newspaper reported on Friday.

The investigation, which involves 15 of the world’s largest banks, began following the presentation of evidence by UBS, Valor Economico reported, without naming its sources.

A UBS press representative did not immediately respond to a request for comment.

In a document released Thursday, antitrust watchdog Cade alleged the banks colluded to influence benchmark currency rates in Brazil by aligning positions and pushing transactions in a way that deterred competitors from the market between 2007 and 2013, at least. Foreign exchange trading in Brazil is estimated at about $3 trillion a year, excluding swaps and derivative transactions.

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