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« WATCH: Holder Announces Criminal Charges Against UBS Libor Traders | Main | Bernanke: "I Wish I Could Just Wave A Magic Wand" »
Wednesday
Dec192012

Lanny Breuer: The Real Reason UBS Rigged Libor

Dec. 19 (Bloomberg) -- U.S. Assistant Attorney General Lanny Breuer speaks at a news conference on the settlement reached with UBS on Libor manipulation.

'To maximize profits and to hide its weakness during the crisis.'

Update:

UBS Libor Traders Face Criminal Charges

Speed Read: The Juiciest Bits From the UBS LIBOR Settlement

---

UBS to Pay $1.5 Billion to Settle Libor Charges In U.S.

ZURICH Dec 19 (Reuters) - Swiss bank UBS agreed to a $1.5 billion fine on Wednesday after admitting to fraud and bribery in a deepening scandal over the rigging of global benchmark interest rates.

Dozens of UBS staff manipulated the Libor rate, which is used to price trillions of dollars worth of loans across three continents, in collusion with brokers and traders at other banks, according to an international investigation.

U.S. prosecutors also lodged criminal charges on Wednesday against two former UBS senior traders for the Libor manipulation, the first individuals to be charged in the wide-ranging investigation that involves more than a dozen big banks.

 

WATCH: Holder Announces Criminal Charges Against UBS Libor Traders

 

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Reader Comments (7)

The other thing we got from the Justice Department's Libor charges, which has been sorely missed in the financial crisis investigations, were some actual villains. Hayes ran a global rate-rigging crew, driven by bribes and promises of profits. Along with Hayes, the U.S. charged former UBS trader Roger Darin with criminal conspiracy. Hayes was also charged with wire fraud. As with the charges against Barclays (BCS), it's amazing once again just how many people knew Libor was being manipulated and were involved. The U.K.'s Financial Services Authority, which also charged UBS with fraud, said that more than 40 individuals at UBS were involved, including managers and senior managers.

http://finance.fortune.cnn.com/2012/12/19/libor-ubs-victims/
Dec 19, 2012 at 6:33 PM | Registered CommenterDailyBail
Dec 19, 2012 at 6:35 PM | Registered CommenterDailyBail
Derivatives have been shit since day 1. If you wrote them up or traded in them, you are guilty.
Dec 19, 2012 at 7:21 PM | Unregistered CommenterHoward T. Lewis III
Change alright for the worse!

Counterparites: 2012 — The year of bank fraud

http://blogs.reuters.com/felix-salmon/2012/12/19/counterparites-2012-the-year-of-bank-fraud/

PAYBACK TIME FOR ANYONE WHO MESSES WITH O's buddies

UBS Libor Traders Face U.S. Criminal Charges

http://www.bloomberg.com/news/2012-12-19/ubs-libor-fine-soars-as-traders-bribed-brokers-to-fix-libor-rate.html

Fannie Mae, Freddie Mac Libor Loss Tops $3 Billion in Audit

http://www.bloomberg.com/news/2012-12-19/fannie-mae-freddie-mac-libor-loss-tops-3-billion-auditor-says.html
Dec 19, 2012 at 7:51 PM | Unregistered CommenterLadyLiberty
MORE: Wall Street's latest sucker: Your hometown

Why Citi understated its rate matters. In Barclays' case, it was clear that traders at the bank were trying to profit from the manipulation. But if Citi lied solely to make it look better, law professor John Coffee of Columbia says that may not be enough to prove it was trying to manipulate Libor.

"Criminal prosecutors are unlikely to go after a bank that was just trying to make itself look good," says Coffee.

Still, a number of investors, pension funds and municipalities have begun to bring suits, and Citi is named in a number of them. The fact that Citi's rates were so far from reality might make the bank an easy target. What's more, at such a large bank, it will be easy to find some division of the bank that would have benefited from an artificially low Libor rate. In fact, the 2010 academic Libor study found that Citi's interest revenue jumped in early 2009, at around the same time most suits claim Libor was being manipulate.

In general, banks tended to bunch their Libor quotes. As a result, Conan Snider, who is an economics professor at UCLA and co-author of the 2010 study, says it makes sense that Citi's rate would have been the most manipulated. The worse shape you were in, the more you had to lie to keep your rate in line with others. And in late 2008 and early 2009, few banks were worse off than Citi. Now, what they did to cover that up may come back to haunt the bank.

When it comes to the lies Wall Street told during the financial crisis, it appears, all is far from forgiven.
There's a shock. Does this mean that they will dismiss entire departments in the banks and possibly arrest more people. How about municipalities?
Dec 19, 2012 at 9:06 PM | Unregistered CommenterSKINFLINT
UK charges ex-UBS trader Hayes in Libor investigation

http://www.reuters.com/article/2013/06/18/us-libor-hayes-charges-idUSBRE95H0A120130618


(Reuters) - Britain's fraud prosecutor on Tuesday charged former UBS (UBSN.VX) trader Tom Hayes with eight counts of conspiracy to defraud, as part of a global investigation into the manipulation of benchmark interest rates.

Hayes, 33, was arrested by police and the Serious Fraud Office last December as part of an inquiry stretching from the U.S. to Japan. He was charged by U.S. prosecutors last year.
Jun 18, 2013 at 7:58 AM | Unregistered Commenterjohn
Well John There is a suprise. Small fish and big fish walk away with huge endowments courtesy of the tax payer. Bend me over.
Jun 18, 2013 at 11:01 AM | Unregistered CommenterSKINFLINT

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