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UBS Libor Manipulation Merits A Death Penalty

Bloomberg View Memo Pad

UBS Libor Manipulation Merits A Death Penalty


Dec. 24 (Bloomberg) — There is no point in mincing words: UBS AG, the Swiss global bank, has been disgracing the banking profession for years and needs to be shut down.

The regulators that allow it to do business in the U.S. — the Federal Reserve, the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Office of Comptroller of the Currency — should see that the line in the sand was crossed last week. On Dec. 19, the bank paid $1.5 billion to global regulators — including $700 million paid to the CFTC, the largest fine in the agency’s history — to settle claims that for six years, the company’s traders and managers, specifically at its Japanese securities subsidiary, manipulated the London interbank offered rate and other borrowing standards.

Libor is a benchmark index rate, off which trillions of dollars of loans are priced on a daily basis. According to the Wall Street Journal, two of the many victims of the Libor fraud — a scandal that so far has nabbed Barclays plc and UBS but will probably include other large global banks — were the quasi-federal housing agencies Fannie Mae and Freddie Mac, which together claim to have lost more than $3 billion as a result of the manipulation.

The same day of UBS’s global settlement, which included the Japanese subsidiary pleading guilty to fraud, two former UBS traders, Tom Hayes and Roger Darin, were sued by the Justice Department and charged with “conspiring to manipulate” Libor.

“The alleged conspirators we’ve charged — along with others at UBS — manipulated the benchmark interest rate upon which many transactions and consumer financial products are based,” Attorney General Eric Holder said in a statement. “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.”

To see the level to which UBS employees descended, one need look no further than their written communications, as per U.S. prosecutors’ document dump. “Mate yur getting bloody good at this libor game,” one broker told a UBS derivatives trader. “Think of me when yur on yur yacht in monaco wont yu.”

But, then again, UBS and bad behavior have become nearly synonymous. During the financial crisis, UBS took writedowns totaling some $50 billion, prompting the company to produce a 76-page, single-spaced, Orwellian transparency report. “In the aftermath of the financial market crisis it was revealed,” the report said, “that UBS had taken a serious turn in the wrong direction under the leadership of the senior management then in charge of the bank. The result was an enormous loss of trust.”

In February 2009, UBS entered into a deferred-prosecution agreement with the Justice Department and admitted to helping American taxpayers defraud the Internal Revenue Service. UBS agreed to provide the names of some clients whom it had helped to avoid U.S. taxes and to pay a fine of $780 million.


  1. tazintally December 26, 2012

    The death penalty is needed for BoA, Wells Fargo and the rest who created the “housing bubble” that has ruined the global economy as well.

  2. nobsartist December 27, 2012

    What about the bush crime family? We name aircraft carriers after these jackass’s.

    By the way, why is bush in a texas hospital? Doesnt he like romney care or isnt it good enough for royalty?

  3. howa4x December 27, 2012

    This whole problem is due to our collective lack of any moral compass. All these people claim to belong to a religion so why have these institutions failed so badly. Morality is seen today as a bunch of niave do gooders by those trying to grasp financial glory. To most people on Wall st morals are a silly notion, and get in the way of wealth. Even though I bet all these heads of financial empires give to their local religious organizations, not in the spirit of alms but more as an ego trip of how much disposable income they have. They want to be admired for this and giving that way provides another outlet for adulation. Like having their name on a building. We live in an amoral country so why do we pretend that we don’t. Both parties and all the religions participate in the accumultion of wealth, so why are we so shocked when someone breaks the rules. It goes on everyday. Why do we have moral outrage. It seems silly anymore.

    1. ggacre99 December 27, 2012

      howa4x, you are right about lack of morality in big business. Notwithstanding overwhelming evidence provided on a near daily basis of the manipulation and fraud perpetrated by financial institutions that costs us trillions, there is a large segment of the population that continues to blame our social net for financial difficulties (I won’t go into their refusal to even consider taxing monies acquired by the individuals who profit from these frauds). However, you are completely wrong to even mention religion in the same breath as morality. Morals are developed by societies and change when societal needs change; that is why we no longer consider it a moral duty to hang, drown or burn witches, although it does appear that we are trying desperately to hang onto certain ‘classes’ of people we are allowed to persecute. I haven’t witnessed any real moral outrage in politics in at least 30 years. Oh, there has been hand-wringing and teeth gnashing but generally by folks who are later discovered to be engaging in similar, or worse, activity and these folks exhibit neither embarrassement nor shame at their actions or their fake outrage

      1. howa4x December 27, 2012

        The only issue I disagree with is to me Religions in this country are big business themselves. Think of the mega church’s and how much the prechers make, or how much land they all own. Think of the Catholic church and how much wealth it has,and the fact they are one of the biggest land owners in NYC. Most of religions are invested in the same stock market and benefit. This makes them not so quick to shame anyone. Think of the meltdown in 08. Did any Jewish leaders come out and blast the fraud of Madoff?No because he gave millions to them. That is my point. There is no fear of societal shame anymore

        1. ggacre99 December 27, 2012

          I don’t disagree with any of your points, I just don’t see religion having anything at all to do with morality. Religion, by its very nature, is immoral.

          1. howa4x December 27, 2012


  4. Debbie Kiesel-Ryan December 27, 2012

    I don’t think UBS is the only manipulator, I would venture to guess there some real bad stuff going on over at BOA. I was a customer of there’s until I had to go to the FTC to file a claim against them and someone they claimed they paid on my behalf. Turns out BOA didn’t pay anyone, but they wanted me to make up $995 they claimed they paid. I wrote a check for $9.95, the man claimed the check for $995, BOA bounced it and sent me the bounced check notices and claimed the man had me on recorded message. But, funny how the security officer I was dealing with didn’t bother to ask to listen to the recording, but the FTC requested it, and he could not produce it. It did not exist, and I won my claim. The guy I was dealing with is in jail for Interstate bank and wire fraud, but I don’t know if BOA was ever fined, I just know I will never do business with them again, they tried to fraud me right along with the jail bird!!!!!! Oh and they told me their bounced check notice and their statment is not proof something was not paid?????? Why do they send you these paper records and why do they have bounced check notices if they are not valid????? I Hate Non-Bank of UnAmerica!!!!!!!

  5. Joseph Glackin December 27, 2012

    It’s time to take them down. Not just for what they have done, but as a signal to all financial institutions.

  6. kay December 27, 2012

    Think Barney Frank, Christopher Dodd and few other choice democraps could see some jail time too. Just more bankster-politician rape, pillaging and plundering of the American wealth. Ever wonder why none of these crooks are behind bars?

    1. Sick of everything December 28, 2012

      What Frank and Dodd did isn’t squat compared to the rest. So they got some deals financing some property, BFD nothing compared to these slime balls.

  7. Sick of everything December 28, 2012

    Yep these ass-holes and all the Walstreeters and their banker buddies along with HSBC need to at least go to jail and have everything they own taken from them just like they would do if any of us pulled any stunts like these clowns did. This buying your way out of prosecution is bs and needs to be stopped. We should probably include DOJ, DEA,and DHS.


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