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UBS pays $545 million to settle FX rigging claims; others to follow

May 20, 2015, 9:13 AM UTC
The entrance of the Swiss banking giant UBS main headquarters is seen on September 15, 2011 in the center of Zurich. UBS revealed that a rogue trader had lost an estimated $2.0 billion (1.46 billion euros) in unauthorised trades, and that it may plunge into the red as a result. Shares in the bank nosedived on the announcement which was issued two minutes before trading began, plummeting 7.04 percent to 10.16 francs, before recovering slightly to a loss of about 5 percent.   AFP PHOTO / FABRICE COFFRINI (Photo credit should read FABRICE COFFRINI/AFP/Getty Images)
The entrance of the Swiss banking giant UBS main headquarters is seen on September 15, 2011 in the center of Zurich. UBS revealed that a rogue trader had lost an estimated $2.0 billion (1.46 billion euros) in unauthorised trades, and that it may plunge into the red as a result. Shares in the bank nosedived on the announcement which was issued two minutes before trading began, plummeting 7.04 percent to 10.16 francs, before recovering slightly to a loss of about 5 percent. AFP PHOTO / FABRICE COFFRINI (Photo credit should read FABRICE COFFRINI/AFP/Getty Images)
FABRICE COFFRINI 2011 AFP

Swiss banking giant UBS AG (UBS) has become the latest bank to offer a guilty plea to the Department of Justice as part of a $545 million settlement over manipulation of financial markets.

The bank said in a statement Wednesday that it had pleaded guilty to one count of wire fraud in relation to its manipulation of the LIBOR benchmark interest rate after the DoJ terminated a non-prosecution agreement related to the affair that the two sides struck in 2012.

By pleading guilty to the LIBOR fraud, the bank has been granted conditional immunity from prosecution for manipulating global foreign exchange fixings, but will pay a fine of $342 million to the Federal Reserve and undertake what it called “a series of remedial measures.” Its role in the FX fixings scandal appeared to put it in violation of the 2012 NPA.

UBS had already paid $799 million to U.S. and U.K. authorities in November in a partial settlement of the alleged rigging of FX benchmarks, and Wednesday’s announcement represents the bank’s attempt to draw a line under the affairs.

“We self-detected this matter and reported it to the U.S. Department of Justice and other authorities,” chairman Axel Weber and CEO Sergio Ermotti said in the statement. “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.”

The Zurich-based bank said that it had already fully provisioned for the settlement and that there would be no impact on its second-quarter results.

The settlement comes ahead of a broader one with with four other banks that the DoJ and others are expected to announce later Wednesday. The biggest fine is set to hit the U.K.’s Barclays Plc (BCS) which had chosen not to settle with regulators in November, and which also has an NPA with the Justice Department related to LIBOR-rigging.