Switzerland's giant UBS bank is paying $1.5 billion in fines to international regulators after admitting its fraudulent role in rigging a key global interest rate for loans.
UBS agreed Wednesday to pay the fines to U.S., British and Swiss authorities, along with pleading guilty to a fraud charge in the United States. Last June, American and British regulators fined Britain's Barclays bank $450 million in the same case.
More financial institutions are under investigation as regulators look at how financial traders' deals influenced the benchmark lending rate known as Libor, short for the London interbank offered rate. Libor is used worldwide to set interest rates on more than $300 trillion in financial products.
Investigators said the UBS manipulation of the Libor rate was centered in its Japanese office. From 2005 to 2010, traders there sought to boost their profits and hide the Swiss bank's financial problems in 2008 by submitting false information for the calculation of the Libor. One trader offered a fellow employee as much as $100,000 to help him keep the Libor rate low.
The traders and brokers called each other by such names as “superman” and “captain chaos” and asked each other to “be a hero today” in manipulating their financial data. UBS Chief Executive Sergio Ermotti said 30 to 40 people had left the bank during the investigation.
He said his financial institution deeply regrets “this inappropriate and unethical behavior” and that it is “committed to doing business with integrity.”