UBS Makes Bid for Immunity from US and EU Regulators over FX Manipulation

UBS AG, the embattled banking giant under investigation for interest-rate rigging and Fx manipulation, has launched a bid to seek immunity in both the United States and the European Union, according to a recent Bloomberg statement.

Having already spared itself the worst of a series of refractions, UBS opted to come clean and disclose its role in the manipulation of London Interbank offered rate (Libor) – however this has not stopped a panel of international regulators from placing several banks under the microscope with virtually all of the industry’s leading stalwarts found to be tied to illegal practices and benchmark fixing. In a further move of good faith however, UBS has expressed its desire to admit its misconduct with regards to currency markets to both EU and US regulators in an effort to procure a measure of leniency.

EU Cooperation Spares Record Fine

Indeed, the upheaval of the global financial industry has spawned over three separate investigations already into a $5.3 trillion-a-day Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term market. The largest dealer in currency exchanges, Deutsche Bank, together with UBS AG, Credit Suisse, Citibank and the Royal Bank of Scotland (RBS) have all faced a series of impositions consisting of firings, suspensions and record fines.

According to Douglas Tween, a lawyer at Baker & McKenzie LLP and a former Justice Department attorney, “They’ve been through the drill and understand the benefits of cooperation. You want to limit your exposure as much as you possibly can.” Last December, UBS managed to avoid a staunch $3.4 billion fine – the largest ever by an antitrust organization – levied by the EU for its cooperation in reporting the existence of a unified cartel to global regulators in relation to the Yen Libor manipulation.

UBS Seeks Immunity in US

US Federal laws stipulate that a company can be issued immunity from fines or charges if it is the first such firm to cooperate and comply with a government investigation. Furthermore, companies that come clean later on and are successful in unmasking a conspiracy or cartel can win amnesty and face discounted penalties or fines. “This has led companies facing charges to help develop cascading cartel cases across an industry,” Tween added. However, this immunity on the antitrust front does not extend unilaterally, specifically prohibiting the same nature of treatment form the Justice Department’s fraud division.