UBS AG (UBSN) will pay about $1.5 billion and two former traders face prison as the bank settled charges with U.S. and U.K. authorities for manipulating interest rates in a global conspiracy to boost profits and bonuses.
Tom Alexander William Hayes and Roger Darin were charged with conspiracy in a criminal complaint unsealed today, the U.S. Justice Department said. Hayes also was charged with wire fraud and a price-fixing violation for manipulating the London Interbank Offered Rate at another bank, the department said.
“Make no mistake, for UBS traders, the manipulation of Libor was about getting rich,” Assistant Attorney General Lanny Breuer, the head of the Justice Department’s criminal division, said in a news conference in Washington.
The charges are the first brought by U.S. officials against individuals alleged to have manipulated Libor and comparable benchmarks in Europe and Japan.
The U.S. Commodity Futures Trading Commission’s $700 million fine is the largest in the agency’s history, David Meister, the commission’s head of enforcement, said at the news conference. The total penalties of $1.5 billion represent about one-third of the bank’s 2011 net income.
UBS fell 0.3 percent to 15.20 francs in Swiss trading after rising as much as 2.4 percent during the day.