UBS Fined $1.5 Billion by Regulators for Rigging Libor

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And the hits keep coming. I think a Seal team should be dispatched to these banks and take out the head office. Think of it as protecting Americans from terrorists. Financial ones. QB


UBS Settles Libor Probe for 1.4B Swiss FrancsUBS AG (UBSN), Switzerland’s biggest bank, must pay about 1.4 billion Swiss francs ($1.5 billion) to U.S., U.K. and Swiss regulators for trying to rig global interest rates, triple the penalties levied against Barclays Plc. (BARC)Enlarge imageA UBS AG logo sits on the wall of the company's Finsbury Avenue offices in London. Photographer: Jason Alden/BloombergEnlarge imageUBS said today it expects to report a fourth-quarter loss of between 2 billion francs and 2.5 billion francs, primarily as a result of litigation provisions and regulatory matters. Photographer: Gianluca Colla/BloombergEnlarge imageUBS Chief Executive Officer Sergio Ermotti said, “We want to move forward and I think we’re showing our determination in the bank to move forward and to change the bank for good. It’s important to recognize mistakes like we do today." Photographer: Gianluca Colla/BloombergFines from the U.S. Commodity Futures Trading Commission and the U.S. Department of Justice total $1.2 billion, UBS said in a statement today. It will pay 160 million pounds ($260 million) to the U.K. Financial Services Authority, the largest- ever fine imposed by the regulator, and disgorge 59 million francs in estimated profits to the Swiss Financial Market Supervisory Authority.“Clearly, this chapter isn’t positive,” UBS Chief Executive Officer Sergio Ermotti told reporters on a conference call. “We want to move forward and I think we’re showing our determination in the bank to move forward and to change the bank for good.”About 30 to 40 people have left UBS as a result of the probes, Ermotti said, adding that the behavior of certain employees was “unacceptable.” He said he doesn’t expect any more departures.UBS rose 0.4 percent to 15.31 francs by 9:25 a.m. in Swiss trading. The stock has advanced 37 percent in 2012, outpacing a 23 percent increase in the Bloomberg Europe Banks and Financial Services Index, which tracks 38 companies.

2,000 Requests

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. Barclays, the U.K.’s second-biggest bank, agreed to pay 290 million pounds in June to resolve the U.S. and U.K. Libor probes.The U.K. finance regulator found more than 2,000 documented requests by UBS traders to manipulate rates in chat messages and group emails, and that at least 45 people at the bank knew of the practice between over a six-year period until the end of 2010. Bank employees colluded with interdealer brokers and paid them bribes to help manipulate yen Libor submissions by other banks, the FSA said in a statement.“This is quite outrageous,” said Dirk Becker, a Frankfurt-based analyst at Kepler Capital Markets with a reduce rating on UBS. “I was surprised that UBS was apparently one of the biggest instigators of this scandal.”

Influencing Submissions

http://www.bloomberg.com/news/2012-12-19/ubs-fined-1-4-billion-swiss-francs-for-manipulating-libor-rate.html

Banks See Biggest Returns Since ’03 as Employees Suffer

For employees at the biggest Wall Street banks, 2012 brought a humbling post-crisis reality of job cuts, lower pay and tarnished reputations. For investors, it was a happier story.Enlarge imageA trader walks past a row of telephones on the floor of the New York Stock Exchange (NYSE) in New York. Photographer: Scott Eells/BloombergEnlarge imageBlankfein, 58, who was awarded a record- setting $67.9 million bonus for fiscal 2007, received $12.4 million in compensation for 2011. Photographer: Peter Foley/BloombergMorgan Stanley CEO James Gorman said last month that employees should stop complaining about lower pay. Photogapher: Peter Foley/BloombergThe 81-company Standard & Poor’s 500 Financial Index (S5FINL) is up 27 percent this year, its largest annual increase since 2003, led by a 104 percent gain in Bank of America Corp.The index beat the broader S&P 500 Index for the first time since 2006.Shareholders, impatient for the industry to boost profit, were rewarded as Wall Street firms cut jobs and pay, and exited businesses. The shrinking unnerved employees, who watched the chiefs of two big banks lose their jobs and others contend with a drop in deal making and stock trading, stiffer regulations, trading losses, rating downgrades and scandals involving interest-rate manipulation and money laundering.“There’s always grumbling on Wall Street, which is pathetic given how overpaid we all are, but there is a level of angst this year that is just unprecedented,” Gordon Dean, who left a 26-year career at Morgan Stanley (MS) to co-found a San Francisco boutique advisory firm this year, said in a telephone interview. “It’s just a profound sadness and dissatisfaction.”Shareholders and bondholders who saw compensation costs at the nine largest global investment banks outpace the gain in revenue from 2004 to 2008 are witnessing a shift: Executives are more focused on investors than rainmakers.

Job Cuts

The nine banks -- Deutsche Bank AG (DBK), Barclays (BARC)Plc, JPMorgan Chase & Co. (JPM), Bank of America, Citigroup (C) Inc., UBS (UBSN) AG, Credit Suisse (CSGN) Group AG,Goldman Sachs Group Inc. (GS) and Morgan Stanley -- announced more than 30,000 job cuts in the first nine months of the year, according to data compiled by Bloomberg.Total pay for traders and investment bankers is about half what it was in 2007, according to an October report from Options Group, a New York-based recruitment firm.“Shareholders have become a lot more vocal,” said Benjamin Hesse, who manages five financial-stock funds and leads a team of 15 analysts and fund managers at Boston-based Fidelity Investments, which oversaw $1.7 trillion in assets as of Nov. 30. “Managements are taking more shareholder-friendly steps, and that’s really across the board.”Goldman Sachs cut headcount and raised its dividend in the second quarter, the first time the New York-based bank has done both in the same period. It also named the smallest class of partners since going public in 1999. Morgan Stanley probably will report lower compensation costs in 2012, even as its shares went up, something that hasn’t happened in at least 15 years.

Rewarding Investors

http://www.bloomberg.com/news/2012-12-19/banks-see-biggest-returns-since-03-as-employees-suffer.html