WATCH: Holder Announces Criminal Charges Against UBS Libor Traders

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

Hell freezes over.

Short clip from this afternoon's DOJ presser.  Holder announces criminal charges against two former UBS traders, William Hayes and Roger Darin.

Get all the details on the arrests here...

---

Full press conferenece:

Dec. 19 (Bloomberg) -- U.S. Attorney General Eric Holder, Assistant Attorney General Lanny Breuer of the Justice Department's criminal division, David Meister, director of enforcement for the Commodity Futures Trading Commission, and Kevin Perkins, associate deputy director of the Federal Bureau of Investigation, speak at a news conference about the government's settlement with UBS AG of charges the company manipulated the London Interbank Offered Rate, Libor. Holder also announces charges against two former UBS traders, Tom Alexander William Hayes and Roger Darin charged for their alleged roles in the scheme.

Get all the details on the arrests here...

---

Attorney General Eric Holder Speaks at the UBS Press Conference

Washington, D.C. ~ Wednesday, December 19, 2012

Good morning – and thank you all for being here.   Today, I’m joined by Assistant Attorney General Lanny Breuer, of the Justice Department’s Criminal Division; Deputy Assistant Attorney General Scott Hammond, of the Antitrust Division; David Meister, Director of Enforcement for the U.S. Commodity Futures Trading Commission; and Associate Deputy Director Kevin Perkins, of the FBI – as we announce the latest actions in our ongoing efforts to investigate and prosecute financial crimes – and to move both fairly and aggressively in bringing the perpetrators of these crimes to justice.

Today, the Justice Department is filing a criminal information charging UBS Securities Japan – a subsidiary of the multinational financial institution UBS AG – with felony wire fraud for engaging in a scheme to manipulate the London Interbank Offered Rate, or LIBOR – a key benchmark for financial products and transactions around the world.   The company has agreed to plead guilty to this charge, to admit to its criminal conduct, and to pay a $100 million fine.

UBS AG – the parent company of UBS Japan – has agreed to pay a penalty of $400 million to the United States government; to admit and accept responsibility for its misconduct; and to continue cooperating with the Department’s ongoing investigation as part of a non-prosecution agreement.   Combined with roughly $1 billion in regulatory penalties and disgorgement, these criminal fines and penalties bring today’s total resolution to approximately $1.5 billion.   The non-prosecution agreement illustrates the significant steps that UBS has taken to help investigators uncover LIBOR misconduct, and to implement remedial measures strengthening the company’s internal controls.   And it reflects the Department’s determination to rigorously enforce federal financial crime laws – and underscores our willingness to bring criminal charges under these laws when they are supported by the facts.

Additionally, in a separate complaint, two former UBS traders have been charged with conspiracy for their alleged roles in this scheme – which allowed UBS to boost its trading profits by placing bets on the movement of benchmark interest rates, and then manipulating those rates.   One of these individuals has also been charged with wire fraud and an antitrust violation in connection with these activities.

By causing UBS and other financial institutions to spread false and misleading information about LIBOR, these alleged conspirators – and others at UBS – manipulated the benchmark interest rate upon which many consumer financial products – including credit cards, student loans, and mortgages – are frequently based.   They defrauded the company’s counterparties of millions of dollars.   And they did so primarily to reap increased profits, and secure bigger bonuses, for themselves.

The prosecution we announce today is emblematic of the critical work that’s being led by the Financial Fraud Enforcement Task Force.   Launched by President Obama in 2009 – in order to fight against fraud, manipulation, and other forms of criminal conduct in the financial sector – the Task Force represents the biggest and broadest coalition of investigators, law enforcement officials, and regulatory agencies ever assembled to combat fraud.   I am honored to chair this group.   And I’m proud of the progress it has enabled us to make – in strengthening relationships across federal agencies and with relevant authorities around the world; in streamlining our investigative and enforcement efforts across multiple offices and agencies; and in implementing cutting-edge strategies for recovering – and more effectively utilizing – precious taxpayer resources.

Thanks to the Task Force’s extraordinary efforts, our approach in identifying and combating financial fraud has never been smarter, more systematic, or more effective.   In recent years, this has enabled us to execute the largest financial and health-care fraud takedowns on record; to carry out the biggest bank fraud prosecution in a generation; and to secure charges – and record sentences of more than 100 years – in a range of cases against CEOs, CFOs, corporate owners, board members, presidents, general counsels, and other executives of Wall Street firms, hedge funds, and banks that engaged in fraudulent activities.

These results – and the actions we announce today – stand as a testament to the hard work of investigators, prosecutors, law enforcement officials, and analysts from the Department’s Criminal and Antitrust Divisions, the FBI, and a variety of partner agencies and organizations.  I’d particularly like to thank our allies and counterparts from the CFTC’s Division of Enforcement – which referred this matter to the Department – as well as the Securities and Exchange Commission, the U.K. Financial Services Authority, the Swiss Financial Market Supervisory Authority, the Japan Financial Services Authority, and the Japanese Ministry of Justice – all of whom made invaluable contributions to our investigation.

Finally, I’d like to acknowledge the tremendous work of each of the Task Force members, Justice Department leaders, local officials, and critical agency partners who have made today’s announcement possible.   And I’d like to turn things over to another key leader – Assistant Attorney General Lanny Breuer – who will provide additional details about today’s actions.

Source - DOJ

Comments

[Howard T. Lewis III]

Why doesn't another branch of government arrest this poor fool? Hell has yet to freeze over. Maybe someone will open the hatch and toss in an ice cube when they toss in Eric 'The Holder' Holder.

[LadyLiberty]

Nah hell didn't freeze over UBS messed with O's golfing buddy so it's payback time is all hell freezing over would be if he actually charged anyone else.

Bosses Rein In Banker Who Golfs With Obama

http://dealbook.nytimes.com/2012/06/20/bosses-rein-in-banker-who-golfs-with-obama/

Obama’s ‘Banker BFF’ Is Now Obama’s ‘Self-Employed Consultant BFF’

Wolf is hanging his own shingle just a month after the Times reported that he had angered his bosses at UBS by golfing and going on vacation with the president.

http://nymag.com/daily/intelligencer/2012/07/obamas-banker-bff-leaves-ubs.html

Attorney General Eric Holder Speaks at the UBS Press Conference

"The company has agreed to plead guilty to this charge, to admit to its criminal conduct, and to pay a $100 million fine."

http://www.justice.gov/iso/opa/ag/speeches/2012/ag-speech-121219.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

Counterparites: 2012 — The year of bank fraud

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

[SKINFLINT]

We can only hope that this continues in a big way. Congrats to Mr. Holder on this one.

[hidflect]

Unbelievable. Eric "hold 'em" Holder has finally prosecuted someone? What gives? This is a total break with his precedent. I smell a rat.

[LadyLiberty]

hidflect bet you they get zero jail time but if they do it's likely because they couldn't pay off the justice department like the big wigs could

The Justice Department's criminal division, which arranged the guilty plea and a $100 million fine from the Japanese subsidiary, also struck a non-prosecution agreement with the parent company. That deal included a $400 million fine.

http://mobile.nytimes.com/dealbookarticle?articleId=545476

LOOKEY HERE ANOTHER SWEET DEAL

Banks Seek a Shield in Mortgage Rules

snip

As regulators complete new mortgage rules, banks are about to get a significant advantage: protection against homeowner lawsuits.

http://dealbook.nytimes.com/2012/12/17/banks-seek-a-shield-in-mortgage-rules/?ref=business

[S. Gompers]

Nothing a few strategic campaign contributions can't fix.

[SKINFLINT]

Are these provisions to be retroactive? After the abuses that the banks foisted upon the American populace you would think that there would be a provision that would hold the banks EVEN more accountable. I guess Dodd Frank will just surround the wagons for the banks.

[DailyBail]

Check this out, great photos.

If the Mayan prophecy is true, just how might it all end on Friday? Scientists foretell the cataclysms that could bring on Doomsday

http://www.dailymail.co.uk/sciencetech/article-2250436/Doomsday-2012-If-Mayan-prophecy-true-just-end-

[DailyBail]

Guns Out of Stock at Wal-Mart as Magazine Prices Surge on

http://www.bloomberg.com/news/2012-12-19/guns-out-of-stock-at-wal-mart-as-magazine-prices-surge-on.html

[DailyBail]

Hayes colluded with brokers, counterparts at other firms and his colleagues to manipulate the rate, the Justice Department said. Between 2006 and 2009, a UBS trader made at least 800 requests to the firm’s yen Libor rate-setters, about 100 to traders at other banks, and 1,200 to interdealer brokers, according to the Commodity Futures Trading Commission, which didn’t identify Hayes by name.

“Many UBS yen derivatives traders and managers were involved in the manipulative conduct and made requests to serve their own trading positions’ interests,” the CFTC said. “But the volume of unlawful requests submitted by one particular senior yen derivatives trader in Tokyo dwarfed them all.”

http://www.bloomberg.com/news/2012-12-19/ubs-trader-used-bribery-flattery-to-make-superman-rig-libor.html

[DailyBail]

Silver Bullion Pte, one of Singapore’s largest suppliers of coins and bars to retail investors, says sales tripled since October, part of a global surge in demand that drove holdings to a record.

http://www.bloomberg.com/news/2012-12-20/silver-vaults-stuffed-mean-prices-rising-29-in-13-commodities.html

[LadyLiberty]

No skinflint that protection is for new mortgages supposedly the $26 Billion in the mortgage settlement covered the old ones but Dodd-Frank is not the protection it was cracked up to be at all the TBTF are still TBTF and we taxpayers are still on the hook.

NC had a good article about that sham mortgage settlement in case you missed it

The Top Twelve Reasons Why You Should Hate the Mortgage Settlement

Read more at http://www.nakedcapitalism.com/2012/02/the-top-twelve-reasons-why-you-should-hate-the-mortgage-settlement.html#t8LQeexBiQFwrt0I.99

Another great one on UBS as well

Quelle Surprise! UBS Gets a Cost-of-Doing-Business Fine for “Epic” Libor Fraud (Updated)

After the media uproar about HSBC’s deep involvement in the dirtiest sort of money-laundering, UBS’s mere Libor-fixing might look a tad pale. But the notice by the FSA clearly states that it regarded UBS’s conduct as far worse than that of Barclays, where the chairman, CEO, and president all stepped down. Of course, that was mainly because they dared try to shift blame to the Bank of England, claiming they’d gotten tacit approval, and the Bank would have none of it. But the severity of the sanctions against Barclays set a bar that hasn’t been met in subsequent regulatory actions. And Barclays is important because it shows the idea that you can’t go after top executives is a fiction. Barclays soldiers on despite the loss of its three top officers. Clemenceau was right: “The graveyards are full of indispensable men.”

By contrast, UBS is paying $1.5 billion in fines among three regulators: the FSA, the CFTC, and Finma, a Swiss regulator. The Department of Justice’s Lanny Breuer called the fraud “epic” yet only two staffers are targeted for prosecution: the apparent main actor, trader Mark Hayes, and his colleague Roger Darin, who are charged with mail fraud, price fixing, and conspiracy. Yet the FSA’s notice says that 40 individuals at the bank were involved in Libor manipulation, including 4 senior managers, and another 70 individuals were aware of it.


Read more at http://www.nakedcapitalism.com/2012/12/quelle-surprise-ubs-gets-a-cost-of-doing-business-fine-for-epic-libor-fraud.html#HvW4eff3jejRsMj6.99