UBS fined $541 million over FX rigging and Libor in first of fresh wave of bank penalties

UBS has paid a $545 million fine for rigging both interest rate and foreign exchange markets and pleaded guilty to both offences.

In a complicated deal with the US Department of Justice the Swiss banking giant avoided criminal prosecution over forex rigging but had a previous non-prosecution deal over Libor fixing swept aside.

The deal came on a day when five banks were set to receive fines totalling as much as $6 billion largely for rigging foreign exchange markets.

By far the largest fine was that expected to be levied against Barclays which had already set aside £2 billion for it and which chose not to join in a mass settlement by banks last November.

By doing that, Barclays risked losing the normal 30% discount offered by the Financial Conduct Authority to institutions which agree to settle cases quickly.

Other banks faced with new fines were Royal Bank of Scotland, which paid a total of $634 million in November, Citigroup ($1 billion) and JP Morgan ($1 billion).

UBS had also paid out $799 million to UK and US regulators in forex fines last November.

But because of those forex failings it has now had to plead guilty to a specimen charge of Libor rigging and been put on probation by the Department of Justice for the next three years and fined $203 million

At the same time it is paying $342 million to the US Federal Reserve for “unsafe and unsound” practices in its forex business.

UBS had previously received a degree of immunity because it was the first bank to alert the DoJ to Libor rigging.

Barclays also had a similar non-prosecute deal with the Department of Justice which could also be torn up.

UBS chief executive Sergio Ermotti said: “The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary actions. We made significant investments to strengthen our control framework and compliance programs.

“Our actions demonstrate our determination to pursue a policy of zero tolerance for misconduct and a desire to promote the right culture in our industry.”

Today’s fines take the total imposed by global regulators for forex rigging to just over $9 billion.

This year’s $2.5 billion fine of Deutsche Bank took the total penalties imposed for Libor rigging to $8.5 billion.

Several former dealers are under criminal investigation by the DoJ and the Serious Fraud Office.