Prosecutors from the United States are planning to file charges against several bankers connected with UBS AG’s manipulation of Tokyo interbank lending rates. The charges would be the first to be brought by the US Department of Justice against people who allegedly rigged the London interbank offered rate or LIBOR as well as lending rates in Japan and Europe.
The prosecution is set to start together with the announcement that UBS Securities Japan, the Japanese unit of the Zurich-based bank, would plead guilty of rigging Japanese interest rates from 2007. UBS is set to pay more than $1 billion to settle charges of interest rate manipulation with the Justice Department, the UK Financial Services Authority, the US Commodity Futures Trading Commission, and the Swiss Financial Market Supervisory Authority.
The $1 billion settlement is more than twice the 290 million pounds or around $469 million that Barclays agreed to pay last June in its settlement to the allegations that its employees conspired to rig the LIBOR, a rate used in bank borrowing. According to Karina Byrne, UBS spokeswoman, the bank continues to work with several regulatory authorities to resolve issues connected to the setting of certain global benchmark interest rates.
The US Justice Department didn’t require Barclays to enter a guilty plea to any specific charge. Prosecutors praised Barclays for its timely and complete disclosure of information. The Justice Department gave UBS some conditional leniency in connection with potential antitrust violation connected to submissions for interbank lending rates in Japan.
According to guidelines of the Justice Department, A firm can secure favorable treatment from prosecutors if it is the first to pledge full cooperation in an antitrust probe. To earn the leniency from the Justice Department, the corporation must include an admission that it was part of an antitrust conspiracy and would help identify other members in the scheme.
