Swiss bank UBS fined 3.7 bn euros in French tax fraud case

Yahoo – AFP, 20 February 2019

A Paris court fined Swiss banking giant UBS 3.7 billion euros ($4.2 billion) in a
tax fraud case, a record for such a case in France

A Paris court on Wednesday fined Swiss banking giant UBS 3.7 billion euros ($4.2 billion) in a tax fraud case, a record for such a case in France.

The bank was convicted of illegally helping French clients to hide billions of euros from French tax authorities.

The trial opened last autumn after seven years of investigations, launched when former employees came forward with claims of unlawful conduct.

This came as authorities across Europe cracked down on tax evasion and dubious banking practices in the wake of the 2008 global financial crisis.

In the UBS case, French authorities determined that more than 10 billion euros had been kept from the eyes of their tax officials between 2004 and 2012.

The fine was in keeping with that demanded by the National Financial Prosecutor's office.

UBS's French subsidiary was also fined 15 million euros for complicity.

French judges charge ex-UBS top banker over tax evasion

Yahoo – AFP, 8 Oct 2015

Raoul Weil, the former head of UBS's global wealth management business, 

was slapped with a charge over taxes, as well as another charge for illegally 

canvassing French customers (AFP Photo/Fabrice Coffrini)

Paris (AFP) - French judges have charged a former top-level banker at UBS with tax evasion as part of a probe into the Swiss banking giant, judicial sources said Thursday.

Raoul Weil, the former head of the bank's global wealth management business, was charged with tax evasion and illegally canvassing French customers at the end of September, the sources said.

The Swiss bank was charged in the probe in July and its French subsidiary in March, for allegedly helping rich French clients to hide money in Switzerland amid a global clampdown on tax evasion.

Weil "strongly contests the two charges," his lawyers said in a statement.

The charges against Weil date from between 2004 and 2008. He was ordered to pay a 200,000 euro ($225,000) bond to the court.

France opened a probe into UBS after former employees blew the whistle over the bank's alleged system of setting up dual accounts to hide the movement of capital into Switzerland.

Germany recently handed documents to the French judges which allowed them to evaluate the assets of French clients held by the bank in 2008 at nearly 12 billion euros ($13.5 billion), said a source close to the investigation.

The documents also boosted suspicions that the managers of UBS were allegedly aware that a part of these assets were linked to tax evasion.

The judges last year ordered UBS to pay a hefty bail of 1.1 billion euros.

Weil was acquitted in November 2014 on charges of tax evasion in the United States. He had been accused of conspiring to help Americans hide billions of dollars from US tax authorities.

UBS co-operated with US authorities under an agreement reached in February 2009 that resulted in a $780 million fine and had turned over the names of many of its US clients suspected of tax fraud.

Swiss authorities probe 7 banks for suspected metals price fixing

Yahoo – AFP, Nina Larson, 28 Sep 2015

Swiss competition authorities are investigating UBS, HSBC, Deutsche Bank 

and four other banks on suspicion of price fixing in the precious metals market

(AFP Photo/Fabrice Coffrini)

Geneva (AFP) - Swiss competition authorities said Monday they were investigating UBS, HSBC, Deutsche Bank and four other major banks for suspected price fixing in the trade of precious metals like gold and silver.

The Swiss Competition Commission (COMCO) said it was looking into whether seven banks had colluded to manipulate prices in the precious metals market.

The watchdog said in a statement that it had "opened an investigation against two Swiss banks, UBS and Julius Baer, as well as against the foreign financial institutions Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui."

The Swiss Competition Commission says

it is investigating two Swiss banks, UBS 

and Julius Baer, as well as against the

 foreign financial institutions Deutsche

Bank,HSBC, Barclays, Morgan Stanley

and Mitsui (AFP Photo/Fabrice Coffrini)

COMCO, which opened a preliminary probe in February, said it now had indications that the banks had "possibly concluded illegal competition defying deals" in the trade of the precious metals gold, silver, platinum and palladium.

"We think they can have manipulated the price of these precious metals," COMCO deputy chief Patric Ducrey told AFP.

The competition authority said it especially suspected the banks had fixed the prices of bid/ask spreads within the market.

Ducrey said the banks had all been informed of the ongoing probe, and that the investigation would likely conclude in 2017.

Impact unclear

Credit Suisse analyst Cristine Schmid told AFP it was too early to say how the COMCO probe would impact the targeted banks, beyond pushing up their legal costs.

HSBC is one of several banks being 

investigated by Swiss authorities for

price fixing (AFP Photo/Philippe Huguen)

"We would need to know first of all in case the allegations are true for how long this has lasted, what were the volumes affected and what is the average kind of spreads versus market spreads," she said, pointing out that the longer the alleged price agreements would have lasted, "the worse for the banks."

This was not the first time the role of banks in determining the price of precious metals has been questioned.

In August, the European Commission said it was investigating "anti-competitive behaviour in precious metals spot trading."

And in February, US financial media reported that the Justice Department had opened its own investigation into suspected manipulation of precious metals markets by 10 major international banks: HSBC, Bank of Nova Scotia, Barclays, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Societe Generale, Standard Bank and UBS.

Goldman Sachs, HSBC, Standard Bank of South Africa and the German chemical group BASF have also been under a US investigation since last November over a complaint alleging rigging of the prices of platinum and palladium.

There are moves underway to reform the 

century-old method of gold price "fixing,"

 since the current global benchmark,

 London's Gold Fix, has already been 

tainted by a rigging scandal (AFP

Photo/Sebastian Derungs)

Julius Baer, which was not part of the US investigation, told AFP Monday it would "constructively cooperate" with the COMCO investigation.

UBS, which did not immediately return requests for comment Monday, said in May it had won immunity from criminal fraud charges in the US probe, after agreeing to provide the Justice Department with information about precious metal transactions.

Reform under way

Precious metals have increasingly come under scrutiny after the discovery that other financial benchmarks have been rigged.

Some of the banks under investigation Monday were already hit by massive fines earlier this year after pleading guilty to US charges of conspiring to rig Libor rates, the global commercial interest rate benchmark used to peg millions of rate-sensitive contracts and loans around the world.

Traders operate in the pit at the London 

Metal Exchange in central London, 21 

September 2007 (AFP Photo/Shaun Curry)

That rate is estimated to underpin some $500 trillion worth of contracts.

The price-setting mechanism to determine benchmark prices for precious metals has also been under reform, amid calls for greater transparency.

Panels of banks have until recently agreed on the reference prices for the precious metals.

But last year, the exchange CME Group and financial information giant Thomson Reuters began providing an electronic system for setting benchmark silver prices, and the London Metal Exchange (LME) did the same for platinum and palladium.

There are also moves under way to reform the century-old method of gold price "fixing," since the current global benchmark, London's Gold Fix, has already been tainted by a rigging scandal and attacked by critics as old-fashioned.

A new method for setting the gold benchmark price is expected to take effect in March.

British trader jailed for 14 years for rigging Libor rates

Yahoo – AFP, Alice Ritchie, 3 August 3, 2015

British trader Tom Hayes leaves Southwark Crown Court in London,

on July 31, 2015 (AFP Photo/Niklas Halle'n)

London (AFP) - A British trader was jailed Monday for 14 years for rigging the Libor lending rate while working for UBS and Citibank, in a landmark conviction the judge said would send a message to the banking world.

Tom Hayes, 35, is the first person to be found guilty by a jury of rigging the benchmark inter-bank lending rate, a key reference for financial products around the world from consumer loans to savings accounts.

"The conduct involved here must be marked out as dishonest and wrong and a message sent to the world of banking accordingly," judge Jeremy Cooke told Hayes as he sentenced him at London's Southwark Crown Court.

Hayes had denied eight counts of 

conspiracy to defraud between 2006

 and 2010, when he worked for Swiss

 bank UBS and its US rival Citigroup

(AFP Photo/Carl Court)

Many of the world's top banks have been hit by scandals over the rigging of the Libor rate, which is estimated to underpin some $500 trillion of contracts.

Following his arrest in December 2012, Hayes admitted his crimes to Britain's Serious Fraud Office (SFO) in a bid to avoid extradition to the United States, where he also faces charges.

However, he later pleaded not guilty, insisting his actions were "commonplace" in the banks.

Cooke said the fact that others were doing the same was "no excuse", saying Hayes played a "leading role" in exerting pressure on and training colleagues in how to rig the rates, and making corrupt payments to brokers for their help.

The manipulation required "sophistication and planning" during more than three years at Swiss bank UBS and nine months at US rival Citigroup, both in Tokyo, the judge said.

"You, as a regulated banker, succumbed to temptation in an unregulated activity because you could," he said, adding that Hayes was motivated by money.

Hayes stared ahead, emotionless, as the court heard the jury had found him guilty on eight counts of conspiracy to defraud between 2006 and 2010. His wife and parents sat in court with bowed heads.

He must serve half of his 14-year sentence in jail, and the rest on conditional release.

'Probity, honesty are essential'

The London interbank offered rate -- Libor -- is calculated daily using estimates from banks of their own interbank rates.

However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.

Banks including Barclays, UBS, Royal Bank of Scotland and Deutsche Bank have been fined billions of dollars for manipulating the rates.

In the first criminal conviction arising from a British investigation into Libor, a top banker pleaded guilty in October to manipulating rates. The individual and their employer cannot be named for legal reasons.

In the United States, two former traders at Dutch bank Rabobank have also pleaded guilty to manipulating Libor.

"The reputation of Libor is important to the City as a financial centre and of the banking industry in this country," the judge told Hayes in London.

"Probity and honesty are essential, as is trust which is based upon it. The Libor activities, in which you played a leading part, put all that in jeopardy."

British trader Tom Hayes (R) arrives at Southwark Crown court with

his wife Sarah in London on July 27, 2015 (AFP Photo/Leon Neal)

Entire industry 'complicit'

Hayes joined UBS in Tokyo in 2006, where he was paid a salary of £1.3 million ($2 million, 1.85 million euros) before tax.

He then moved to Citigroup, where he earned £3.5 million before tax for nine months' work before being sacked for "compliance" issues.

He worked as a trader in yen Libor derivatives, betting on movements of the daily rate. The judge had previously described him as "by nature a gambler".

Hayes was diagnosed with Asperger's Syndrome before the trial, but the judge said this was of "no relevance to the issue of dishonesty".

Ben Rose, a partner at law firm Hickman and Rose with experience in the financial services industry, said the conviction was a boost for the SFO which had "a number of other Libor cases in the pipeline".

However, he said it emphasised how "odd" it was that no institutions have been prosecuted for their role.

"When an entire industry... is complicit in a practice it can seem very harsh to pick off isolated individuals," he said.

Five big banks hit with $3.2bn forex rigging fines

Yahoo – AFP, Roland Jackson, 12 Nov 2014

British bank HSBC and US peers Citigroup were among five banks fined

by regulators (AFP Photo/Facundo Arrizabalaga)

The hefty fines centred on London, the world's biggest hub for the $5.3-trillion-per-day forex market, and the British government hailed a move to "clean up corruption" in the City as the financial centre's reputation has been badly damaged in recent years.

British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain's Financial Conduct Authority (FCA) and the US Commodity Futures Trading Commission (CFTC).

JPMorgan is one of five banks facing

 huge fines over alleged foreign exchange

rigging (AFP Photo/Timothy A. Clary)

The FCA hit the five banking giants with a record penalty of £1.1 billion ($1.7 billion, 1.4 billion euros), while the CFTC has fined them $1.4 billion.

The Swiss Financial Market Supervisory Authority (FINMA) also announced a settlement of 134 million Swiss francs ($139 million) with UBS over the matter.

Barclays uncertainty

However Barclays -- which was at the heart of the 2012 Libor rate-rigging affair -- was not included in the settlements and remains under investigation by authorities.

The uncertainty sent Barclays' share price sliding 2.15 percent to 229.55 pence in early afternoon deals on the falling FTSE 100 index. The bank had last month set aside £500 million for a potential fine to settle forex allegations.

In recent years, a string of scandals has damaged the reputation of major banks, which sparked the notorious 2008 global financial crisis that led to a subsequent worldwide recession.

The FCA said that it found "ineffective controls" at the five banks between 2008 and 2013, allowing traders "to put their banks' interests ahead of those of their clients, other market participants and the wider UK financial system".

"The traders put their own interests ahead of their customers. They attempted to manipulate the market and abused the trust of the public and us as regulators," FCA chief executive Martin Wheatley told reporters at a press conference in London.

The FCA said that it had proposed new rules for the 36 banks operating in the foreign exchange market.

British banks HSBC and Royal Bank of Scotland (RBS), US peers Citigroup

 and JPMorgan Chase, and Swiss lender UBS have all been fined by Britain's

 Financial Conduct Authority (FCA) and the US Commodity Futures Trading

 Commission (CFTC) (AFP Photo)

The investigation homed in on trading in the world's top 10 currencies, known as the "G10".

Traders at the different banks "formed tight knit groups in which information was shared about client activity", the British regulator said.

It added that traders used code to identify clients without naming the them. They referred to themselves with nicknames like "The 3 Musketeers", "The Players" and "The A-team".

'Conflicts of interest'

"The banks failed to manage obvious risks around confidentiality, conflicts of interest and trading conduct," the FCA said.

At the same time, the CFTC said in a separate statement that the five banks were being punished for "attempted manipulation of, and for aiding and abetting other banks' attempts to manipulate, global foreign exchange benchmark rates to benefit the positions of certain traders."

It added that Citi, HSBC, JPMorgan, RBS and UBS had "coordinated trading with other banks in private chat rooms in their attempts to manipulate" the market.

The CFTC also ordered the banks to "cease and desist from further violations, and take specified steps to implement and strengthen their internal controls and procedures."

Bank of England governor Mark Carney expressed deep concern over the forex scandal.

Regulators say banks attempted to

manipulate global foreign exchange
benchmark rates to benefit certain traders
(AFP Photo/Scott Olson)

"We have been concerned about the circumstances around this and the conduct in markets more generally," Carney said Wednesday.

News of the FCA fine was welcomed by the British government.

"Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone," said finance minister George Osborne.

"The banks that employed them face big fines -- and I will ensure that these fines are used for the wider public good."

The total FCA fine is a record amount and eclipses the £532 million penalty it handed down over the Libor scandal.

Christopher Dembik, an economist at Saxo Bank in France, said the fines were "extremely weak and perfectly manageable" compared to the banks' holdings.

But he added that it did show a "willingness" of regulators "not to repeat the mistakes made in the last global financial crisis."

Swiss UBS pays millions to Germany in settlement over tax evasion

Swiss banking giant UBS has agreed to pay Germany a hefty fine for its involvement in helping German clients hide money from tax authorities. It's the biggest fine ever paid to the country by a Swiss lender.

Deutsche Welle, 29 July 2014

Zurich-based UBS confirmed Tuesday it had settled investigation charges of aiding German clients suspected of evading taxes.

Switzerland's largest lender agreed with prosecutors in Bochum, Germany, to pay a fine of some 300 million euros ($403 million). The payment will put the case to rest in Germany, but UBS continues to face similar punitive action elsewhere.

The Swiss lender also stands accused of aiding account holders from France and Belgium in hiding their money from domestic tax authorities.

Little impact on earnings

As early as 2009, UBS was able to ward off a trial in the US over its role in helping clients avoid taxes by paying a fine of $780 million in an out-of-court settlement.

Despite continued litigation costs, the lender on Tuesday reported a 15-percent net profit jump in the second quarter, compared to its earnings in the same period a year earlier.

UBS said the hike was driven by strong results from its core wealth management and trimmed-down investment banking franchises.

hg/ng (Reuters, AFP, dpa)

Top UBS banker attacks City culture

UBS's new head of investment banking Andrea Orcel admitted to MPs and peers that banks had become 'too arrogant, too self-convinced' in the runup to the banking crisis

The Guardian, Jill Treanor, Wednesday 9 January 2013

UBS: not the only bank to have been caught trying to manipulate the Libor
rate. Photograph: Carl Court/AFP/Getty Images

Banks are "too arrogant" and must undergo sweeping cultural changes, a top banker at UBS said on Wednesday as the Swiss bank was described by the incoming archbishop of Canterbury, Justin Welby, as a "corrupted organisation".

At a hearing of the banking standards commission, UBS's new head of investment banking, Andrea Orcel, admitted to MPs and peers that banks had become "too arrogant, too self-convinced" before the banking crisis that helped to expose the rigging of interbank lending rates. UBS was hit with a record £940m fine as a result of the scandal last month.

"I think the industry has to change," said Orcel, who joined UBS in July and was dubbed the "Ronaldo of banking" by a commission member, while another called him a "deal junkie".

Chaired by the Conservative MP Andrew Tyrie, the commission was surprised by the bank's admission that it had fired only 18 of the 40 individuals who regulators said knew about the Libor rigging. Tyrie told Orcel that Libor rigging was "a shocker of enormous proportions".

Orcel – who at Merrill Lynch in 2007 advised Royal Bank of Scotland on its ill-fated takeover of ABN Amro, for which he is said to have received a £7.5m fee – insisted that the staff involved in manipulating Libor had been "dismissed, penalised or reprimanded". UBS said 22 people still employed by the bank had been disciplined.

One of those who left before the fine was imposed was named before the commission as Tom Hayes, who had been based in Japan. Andrew Williams, UBS's global head of compliance, said Hayes had been headhunted by Citigroup before his actions had been exposed – prompting laughter at the start of the lengthy hearing. "Clearly his conduct was reprehensible and we are all disgusted by it," Williams said.

The UBS bankers were unable to disclose the size of any bonuses paid to Hayes, who made $260m (£160m) in revenues for UBS during his tenure at the bank between 2006 and 2009. Williams said that it had not been possible to claw back any payments to him as he had forfeited them when lured to Citi.

Lord Lawson, the former Conservative chancellor and member of the commission, who named Hayes, was among those unconvinced by the bank's assertion that top management did not know about the rigging, which was discussed on electronic chat boards viewed by as many as 70 people. Lawson also expressed incredulity that only 18 people had been fired.

Hayes is facing extradition to the US on charges of conspiracy, wire fraud and an antitrust violation. Lawson said the regulatory investigation had shown him to be a "crook of the first order", to which the UBS executives declined to comment, citing the legal proceedings in the US.

Orcel, asked by Labour MP Pat McFadden how many of the traders at UBS were women, admitted that it was likely that more than 90% were male. "That is a failure of UBS," he replied when asked if a greater female presence would have helped to change the culture.

Orcel, who admitted that he would not have advised RBS to proceed with the ABN Amro takeover "with what we know now", said UBS was focused on "recovering the honour and the standing" of the bank. Even so, he said: "I can't tell you that it won't happen again" despite the changes made, which include bonuses no longer tied to individual revenue generation. The ratio of a traders' salary to their bonus could be as much as one to three, he said.

"I am convinced that we have made a lot of progress. I am also convinced that we still need to do more," Orcel said.

Four former UBS executives, including the former chief executive Marcel Rohner, will give evidence to the commission on Thursday, as will the newly knighted Hector Sants, the chief executive of the Financial Services Authority until just before Barclays was hit with a fine of £290m over Libor in June. The coalition set up the banking standards commission following the uproar caused by the Barclays fine.

UBS corrupt payments exposed as bank pays £940m to settle Libor claims

Swiss bank admits wrongdoing in settlement with multiple regulators over manipulation of inter-bank lending rates

guardian.co.uk, Jill Treanor, Wednesday 19 December 2012

UBS will hand over $1.5bn and admit wrongdoing at its Japanese arm to
settle Libor fixing claims. Photograph: Michael Buholzer/Reuters

The Swiss bank UBS has been fined £940m (1.4bn Swiss francs, US$1.53bn) by global regulators for "extensive and widespread" attempts to manipulate key benchmark interest rates known as Libor for five years.

This is the latest and most serious escalation of the rate-rigging scandal and exposes corrupt payments for the first time.

The £160m portion of the fine levied by the Financial Services Authority is the largest ever imposed by the City regulator and surpasses the previous record of £59.5m imposed on Barclays in June for attempted manipulation of the Libor and Euribor rates. The total Barclays fine was £290m and led to the resignation of chief executive Bob Diamond days later.

At UBS at least 2,000 requests for "inappropriate submissions" to the key rates were documented and at least 45 individuals "including traders, managers and senior managers were involved in, or aware of, the practice of attempting to influence submissions", the FSA said. It added that every one of those submissions was potentially suspicious.

The City regulator said UBS had colluded with interdealer brokers to influence submissions to the yen Libor rate and that corrupt brokerage payments of £15,000 a quarter were made to reward brokers for their efforts to manipulate the Libor submissions of other banks on the panel submitting rates.

The UBS fine exposes the full scale of the attempts to manipulate the two rates – London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor).

In its report, the FSA said it had found a UBS trader agreeing with a counterpart that he would attempt to manipulate UBS's submissions in "small drops" to avoid arousing suspicion. The trader made it clear that he hoped to profit from the manipulation and referred explicitly to his UBS trading positions and the impact of the Japanese Libor rate on those positions. He offered to "return the favour" and entered into illicit transactions in order to incentivise and reward his counterparts.

For example, on 18 September 2008 a trader explained to a broker: "If you keep 6s [ie, the six-month Japanese yen Libor rate] unchanged today ... I will fucking do one humongous deal with you ... Like a 50,000 buck deal, whatever ... I need you to keep it as low as possible ... if you do that .... I'll pay you, you know, 50,000 dollars, 100,000 dollars... whatever you want ... I'm a man of my word."

Illicit fees of more than £170,000 were generated for the broker.

Tracey McDermott, the FSA director of enforcement and financial crime, said: "The findings we have set out in our notice today do not make for pretty reading. The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this.

"UBS's misconduct was all the more serious because of the orchestrated attempts to manipulate the Japanese yen Libor submissions of other banks, as well as its own, and the collusion with interdealer brokers and other panel banks in co-ordinated efforts to manipulate the fix."

The Swiss regulator Finma said most of the requests were made by one trader who worked in Tokyo from 2006 to 2009. "The same trader also contacted employees at third-party banks and independent brokers, thereby seeking to influence the Libor submissions of third-party banks," Finma said.

Related Articles:

UBS Libor case uncovers tangled web of bank-broker relations

Two ex-UBS traders charged over Libor

UBS fined $1.5bn for Libor rigging

UBS clients in Germany visited by tax inspectors

Deutsche Welle, 12 November 2012

Raids have been staged across Germany against hundreds of suspected tax evaders. Prosecutors in Bochum city who coordinated Monday's action say the tips came from a CD listing German clients of the Swiss bank UBS.

Fifty tax inspectors and numerous prosecutors had visited the homes and business of "several hundred" suspects in many of Germany's 16 regional states, said Bernd Bieniossek, a leading prosecutor in the western German city.

Reacting on Monday, the Zurich-based UBS said 2009 had been a watershed and since then it had avoided aiding cross-border tax evaders. In August, UBS's new chief Axel Weber said his bank had "zero tolerance" for tax fraud.

Germany's mass tabloid newspaper "Bild" broke the raids story on Monday, saying the latest data CD was one of six purchased since 2010 by the Düsseldorf-based finance ministry of North Rhine-Westphalia (NRW) state. Detectives had obtained the CD three months ago, Bild said.

Bieniossek said that CD also contained details of trust accounts that suspects might have used in Switzerland to evade tax payments in Germany.

Tax treaty wrangle unresolved

NRW's Social Democrat (SPD)-led government, notably Finance Minister Norbert Walter-Borjans, has repeatedly defended such CD purchases despite criticism from Chancellor Angela Merkel's center-right coalition government.

For months, Merkel's federal finance minister Wolfgang Schäuble has sought to finalize a tax treaty with Switzerland which would collect back-dated tax on Germany's behalf. But this move has been blocked in Germany's upper house of parliament by regional states governed by the SPD and the Greens.

UBS long under scrutiny

NRW's finance ministry said probes and self-imposed charges filed by suspected tax evaders since 2010 had generated more than three billion euros ($3.8 billion) in extra revenues. It said the six CDs had also listed clients of the banks Julius Bär and Credit Suisse.

Last Friday, Mannheim prosecutors said that since March they had investigated claims that UBS customers' funds might have been moved through an internal account from Germany to Switzerland.

UBS replied that its own internal investigations had "not revealed any indication of misconduct on the part of UBS Deutschland AB."

Authorities raided the UBS's Frankfurt premises in May and seized electronic records, which are still being evaluated.

Switzerland's long tradition of banking secrecy has come under increasing pressure within Europe and the United States. A 2008 US tax probe resulted in heavy fines.

ipj/dr (AP, Reuters, AFP)

UBS trader Kweku Adoboli 'gambled away' £1.4bn

BBC News, 14 September 2012 

Kweku Adoboli denies charges
of false accounting and fraud

A City trader "gambled away" £1.4bn ($2.3bn) of his firm's money and caused "chaos and disaster", a jury has heard.

Kweku Adoboli, 32, of Whitechapel, east London, exceeded his trading limits at UBS in a bid to get a bigger bonus and boost his ego, the court was told.

He denies two charges each of false accounting and fraud.

Prosecutor Sasha Wass QC told Southwark Crown Court Mr Adoboli thought he had the "magic touch" but his actions saw the Swiss bank's share price fall 10%.

Ms Wass said the trader "did all of this by exceeding his trading limits, by inventing fictitious deals to conceal this, and then he lied to his bosses".

She added: "This colossal loss arose purely as a result of Mr Adoboli's fraudulent deal making, which amounted, as you will see, to nothing more than gambling."

Mr Adoboli had been working as a senior trader at UBS's global synthetic equities branch, buying and selling exchange traded funds, which track different types of stocks, bonds or commodities such as metals.

His dollar trades took place between October 2008 and September 2011, the court was told.

Ms Wass said Mr Adoboli had been "sucked into the gambler's mindset" and "started throwing good money after bad".

The prosecutor said the trading loss was enough to pay a year's salary for nearly 70,000 new nurses, or two Wembley stadiums or six new hospitals.

Ms Wass said Mr Adoboli had "fraudulently side-stepped" the bank's rules that banned high risk and unauthorised investments.

"Mr Adoboli had ceased to act as a professional investment banker and had begun to approach his work as a naked gambler. He had become what is sometimes referred to as a rogue trader," she said.

But the prosecutor said the defendant had gone beyond the behaviour of a "mere rogue trader", faking records over a two and a half year period.

She said: "He faked bookings, he created false accounts and conducted himself as a master fraudster, deliberately and systematically deceiving and defrauding the bank which was employing him."

The trial continues.

Related Articles:

UBS trader 'risked the very existence of the bank', court told

UBS trader Kweku Adoboli risked losing £7.4bn, court told

Libor scandal: Seven banks summoned in US probe

BBC News, 15 August 2012 

Barclays was fined for trying to
manipulate the Libor rates

Seven banks, including HSBC and Royal Bank of Scotland, are to be questioned in the US for alleged manipulation of the Libor inter-bank lending rate.

The other banks receiving subpoenas by the New York attorney general are Barclays, Citigroup, Deutsche Bank, JPMorgan and UBS.

Last month, Barclays was fined £290m by UK and US regulators for rigging Libor.

Some of the world's biggest banks have been embroiled in a number of scandals in recent months.

Following the Barclays fine, US regulators said they were investigating a number of other banks for potential Libor rigging.

A government-ordered review into Libor is currently being conducted by the managing director of the Financial Services Authority, Martin Wheatley.

The Wheatley review is examining how the Libor rate, the benchmark interest rate for trillions of financial contracts including some mortgages, is calculated and regulated.

The current Libor system is no longer a "viable option", Mr Wheatley said.

Libor is calculated using rates submitted by a group of leading banks who estimate how much it costs them to borrow in 10 currencies and 15 lengths of loans, ranging from overnight to 12 months.

There have been a series of allegations over the trading policies of banks in recent months.

Bank woes

On Tuesday, Standard Chartered agreed to pay $340m (£217m) to New York regulators to settle claims that it hid transactions worth $250bn with Iran.

Standard Chartered shares rallied on Wednesday after it agreed to settle the claims, after the institution had been threatened with having its US banking licence revoked.

Last week, New York's DFS alleged that the US unit of the bank had illegally hidden 60,000 transactions with Iran worth $250bn over nearly a decade.

It accused the London-based bank of being a "rogue institution" for breaking US sanctions against Iran.

The bank's chief executive Peter Sands.

HSBC has also been accused of failing to prevent money laundering by the US Senate.

According to the Senate report, the US unit of HSBC carried out 28,000 undisclosed sensitive transactions between 2001 and 2007, an internal audit commissioned by the bank found. The vast majority of those transactions - worth $19.7bn - involved Iran.

As for Barclays, the Libor scandal led to the resignation of chief executive Bob Diamond as well as chairman Marcus Agius.

Last week, Sir David Walker was appointed as the new chairman.

He said he wants to review the way the bank operates and will begin his search for a new chief executive "within days".

Sir David is a senior banker who led the 2009 government inquiry into the rules governing how banks are run.

RBS has already admitted it is being investigated for fixing Libor.

It said: "RBS Group continues to receive requests from various regulators investigating the setting of libor and other interest rates.

"We are cooperating with the investigations and are keeping relevant regulators informed."

Related Article:

US drops probe into banking giant Goldman Sachs