According to two unidentified sources, UBS AG is looking to gain immunity from foreign exchange rate-rigging probes by the European Union and the US. Bloomberg said the bank is trying to repeat its success in limiting the fines it would purportedly get as a result of the ongoing global investigation of currency markets.
Lawyer Douglas Tween at Baker & McKenzie LLP, who is a former Justice Department attorney, said, "They've been through the drill and understand the benefits of cooperation. You want to limit your exposure as much as you possibly can."
In December last year, the Zurich-based bank was able to save billions of euros in fines by revealing its role in the manipulation of the London Interbank offered rate, or Libor to EU. The sources said that the bank is intending to do the same in the investigation in the $5.3 trillion-a-day currency market. Around twelve regulators around the world are currently probing on allegations that traders had been conniving with each other to manipulate the foreign exchange currency rates, Bloomberg said. 21 individuals have been fired or suspended so far as investigations continue.
The news agency first reported that a 2013 filing made by UBS last year revealed that it had conducted an internal investigation over allegations that the WM/Reuters rates that are being used by companies and investors all over the world had been manipulated by unscrupulous traders. Switzerland's biggest lender is one of the top four currency-trading banks in the world, based on a May 2013 survey conducted by Euromoney.
Bloomberg said that lenders usually get some sort of incentive when they report themselves to the EU. EU historically relieve potential penalties on the first company who first report their misdeeds and disclose that of their competitors. The second and the third companies will get their fees discounted by as much as 50%, while subsequent companies get a 20% discount in penalties, the news agency added.
