The entrance to UBS headquarters in Zurich. UBS and other financial institutions have received requests from various authorities relating to their foreign exchange businesses.Reuters/London
Swiss bank UBS AG approached US authorities in September with information relating to an industry-wide probe into alleged rigging of currency markets, in the hope of gaining anti-trust immunity if charged with wrongdoing, sources said.
UBS is seeking to take advantage of a programme from the Justice Department’s antitrust division under which the first company to report misconduct relating to a cartel can earn immunity from antitrust charges if it co-operates and provides information about other members of the group, three sources said.
Following the Libor interest-rate rigging scandal that has so far cost banks around the world $6bn in fines and settlements, UBS sought to act quickly to gather and supply information when similar allegations of wrongdoing by leading banks in foreign exchange surfaced in June, the sources said.
No bank or individual has been accused of any wrongdoing but banks, including UBS, have said they are co-operating with regulators in the investigations. It is not known whether they too have sought first-mover advantage under the DoJ programme.
UBS declined comment beyond pointing to a passage in its third-quarter results released in October, saying that after the June report of irregularities in forex markets, it had started an internal review.
“UBS and other financial institutions have received requests from various authorities relating to their foreign exchange businesses and UBS is co-operating with the authorities,” the bank said.
Authorities including the US Department of Justice (DoJ), Britain’s Financial Conduct Authority (FCA) and watchdogs in Germany and Switzerland are probing allegations of collusion between senior traders at big banks to manipulate benchmark currency rates.
These exchange rates or “fixes” are used to price trillions of dollars worth of investments and deals and are relied on by companies, investors and central banks globally.
Stung by Libor, banks are looking to co-operate more readily with regulators probing the FX allegations, which FCA chief Martin Wheatley has said are “every bit as bad as Libor”.
Banks have put on leave, suspended or fired more than 20 traders in an attempt to show regulators they are co-operating and taking action.
UBS, which received leniency from some US authorities for its role in rigging Libor benchmark interest rates because of the information it supplied, scrambled to compile information on currency trading and get it to the DoJ early, the people said.
The move was “a huge gamble” according to one source, since it was handing over information with no guarantee that it would benefit from a programme that rewards the first firm to co-operate in a cartel probe with immunity from prosecution.
Although UBS paid $1.5bn in 2012 to US and European authorities over alleged efforts to manipulate Libor and other benchmark interest rates - the largest such penalty to date - it did not face antitrust charges, which could have substantially added to its penalties.