UBS Participates in Resolutions of Industry-Wide FX Matter
May 20 2015 - 1:00AM
Business Wire
- Firm faces no criminal charges and no DOJ fine on
FX
- UBS granted conditional immunity from prosecution for FX by
Antitrust Division of DOJ
- DOJ to terminate 2012 LIBOR NPA requiring UBS AG to plead
guilty on legacy LIBOR conduct and pay USD 203 million
- Payment to Board of Governors of the Federal Reserve System
of USD 342 million
- UBS fully provisioned for these resolutions; no financial
impact on 2Q 2015 results
Regulatory News:
UBS (NYSE:UBS) (SWX:UBSN) announced today that it has approved
entering into resolutions with the US Department of Justice (DOJ),
the Board of Governors of the Federal Reserve System (Fed) and the
Connecticut Department of Banking (CT DOB) in their investigations
of the global foreign exchange (FX) markets. This follows the
firm's resolutions last November with the Swiss Financial Market
Supervisory Authority, UK Financial Conduct Authority and the US
Commodity Futures Trading Commission. The bank continues to
cooperate with ongoing investigations by other authorities in this
industry-wide matter, which include investigations of
individuals.
As a result of today's resolutions, UBS has not been criminally
charged for FX conduct. The DOJ will also not file any charges
concerning its investigations into the firm's V10 FX-related
structured products and its precious metals business. In resolving
the FX matter with the DOJ, UBS received conditional immunity from
prosecution for Euro/USD collusion from the Antitrust Division,
which will also not prosecute UBS for any other FX conduct. This
immunity reflects UBS's role as the firm that first reported
potential misconduct to the DOJ, and the full cooperation provided
to the DOJ and other authorities throughout the world.
The DOJ used its sole discretion to terminate its 2012
Non-Prosecution Agreement with UBS related to LIBOR. As a
consequence, UBS AG has agreed to plead guilty to one count of wire
fraud for conduct in the LIBOR matter, pay a USD 203 million fine
and accept a three-year term of probation. This guilty plea for
LIBOR by UBS AG relates to the same conduct that was the basis of
the plea by the firm's Japanese subsidiary when the firm resolved
its LIBOR issues in 2012.
The Fed and the CT DOB jointly issued a cease and desist order
finding that UBS engaged in unsafe and unsound business practices
relating to its FX business. UBS will pay a penalty of USD 342
million to the Fed and has agreed to undertake a series of remedial
measures.
The firm is fully provisioned for these resolutions. As a
consequence, they will have no financial impact on second quarter
2015 results.
UBS Chairman Axel A. Weber and Group Chief Executive Officer
Sergio P. Ermotti said: "The conduct of a small number of employees
was unacceptable and we have taken appropriate disciplinary
actions. We made significant investments to strengthen our control
framework and compliance programs. We self-detected this matter and
reported it to the US Department of Justice and other authorities.
Our actions demonstrate our determination to pursue a policy of
zero tolerance for misconduct and a desire to promote the right
culture in our industry."
Cautionary statement regarding forward-looking
statements
This document contains statements that constitute “forward
looking statements.” While these statements represent UBS’s
judgments and expectations concerning the matters described, a
number of risks, uncertainties and other important factors could
cause actual developments and results to differ materially from
UBS’s expectations. Additional information about those factors is
set forth in documents furnished and filings made by UBS with the
US Securities and Exchange Commission, including the first quarter
2015 report and Annual Report on Form 20-F for the year ended 31
December 2014. UBS specifically prohibits the redistribution or
reproduction of this material in whole or in part without the prior
written permission of UBS, and UBS accepts no liability whatsoever
for the actions of third parties in this respect.
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