UBS forced to pay for fraud and two traders charged
Two former traders for UBS are now facing serious criminal charges due to their involvement in manipulating international interest rates. The Swiss bank has also agreed to pay around $1.5 billion after the case was settlement.
This settlement was reached after a long investigation by law officials all over the world. Assistant Attorney of the United States, Lanny Breuer, calls it “the worst scandal in the international banking industry.”
This payment also settles the claims that were made by the United States government that Swiss banks are responsible for manipulating and attempting to destroy the American economy. UBS finally agreed to several deals that took place with the Justice Department of the United States that also include wire frauds.
However, this isn’t what the investigation ended up revealing only; it was found that extensive misconduct actions were taking place during 2010. More than 45 staff members were involved including managers, who tries to manipulate interest rates in favour of the bank’s trading benefits. They also made the made look stronger than it really was when the financial crisis took place.
UBS also worked with several other international firms, making payments that were corrupt to brokers for more than 18 months. The two accused traders – Tom William, 33, and Darin Alexander, are not in the United States right now but their extradition is happening right now. Both of them face charges of wire fraud, manipulating interested rates, and conspiracy. Their attorneys have not made any comment until now.
“We regret this unethical behaviour,” chief executive Ermotti of UBS, said in a very short statement. “No profit is important or serious as our firm’s reputation, and we will do everything we can to continue working with our integrity.” This is considered to be the biggest scandal in the history of banking, where USB will have to pay three times more than what Barclays paid during their scandal.
Seniors are now planning to fix the damage to their image and reputation as much as they can. It is believed that several of their high end clients are now transferring their money to other banks due to lack of trust. It is also believed that officials working in the bank are planning to start various promotions to attract new clients.
This scandal leaves a footprint on the world of banking where business experts believe that this won’t be the last one the American government has to deal with.