UBS Gets Probation For Rigging $5 Trillion-A-Day FX Market

- UBS Gets Probation For Rigging $5 Trillion-A-Day FX Market
by Tyler Durden, www.zerohedge.com
UBS was “confounded” last week when the Justice Department decided to void a 2012 agreement under which the bank would escape prosecution for its role in manipulating the world’s most important benchmark rate in exchange for ratting out its FX rigging co-conspirators.
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As a reminder, the DoJ is set to extract guilty pleas from a number of TBTF bank logos sometime in the supposedly near future (reportedly later today). The settlements were supposed to have been announced last week but because that didn’t give banks enough time to negotiate all of the fine print and SEC waivers that will serve to strip the agreements of any and all meaning, the announcements had to be postponed.
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As we’ve outlined on several occasions this month, JP Morgan, Citi, Barclays, and RBS will almost certainly be allowed to skirt punishments that should by law accompany their guilty pleas including provisions that make it more cumbersome to raise capital and limit participation in private placements. Those inconveniences, the banks say, would pose a systemic risk and so must be avoided at all costs if they agree to admit to rigging forex markets.
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For UBS, whose assistance was supposedly key to the FX rigging investigation, the squealing rat reputation isn’t completely for naught after all because as you can see from the below, the bank will pay just $342 million to the Fed forrigging FX markets “engaging in unsound business practices” (and nothing to the DoJ), $203 million to the Justice Department in connection with rigging LIBOR, and plead guilty to one count of wire fraud.
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