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UBS Shocked To Learn Ratting Out Fellow Criminals Doesn't Buy DOJ Immunity

Tyler Durden's picture




 

Back in 2012, when the first massive marketwide-rigging scandal made the front pages, that of Libor (one which Zero Hedge discussed first in January 2009 with "This Makes No Sense: LIBOR By Bank" and for which we won early points in the "you are a fringe tinfoil blog" category until proven correct as usual) the prosecution's case was handed on a silver platter by one bank which hoped it would squeeze through the prosecutorial cracks by ratting out all of its heretofore complicit partners in crime: UBS.

And sure enough, UBS did indeed get away with a paltry fine, and the whole affair was quietly swept under the rug with a December 2012 settlement, in which the U.S. agreed not to prosecute the bank on the condition that it “commit no United States crime whatsoever” for the two-year term of the agreement, subsequently extended by an extra year.

Unfortunately for UBS, its reputation as a ratting squealer was all for nothing, because just over one year later UBS as well as virtually all the same banks that were manipulating Libor, were caught rigging that other massive, global market in secret online chatrooms such as the "Bandits" and the "Cartel": foreign currency rates.

And also unfortunately for UBS which had sworn to commit no US crimes, it had just been caught committing at least one US crime. As a result, as Bloomberg reported earlier this week and as WSJ reported tonight, the US "Justice" Department is now tearing up and voiding the UBS 2012 settlement.

Actually, make that two crimes: "UBS also was viewed by the Justice Department as a repeat offender, having reached previous settlements including one in 2011 related to antitrust violations in the municipal-bond investments market."

Actually, make that three crimes: "[Justice Department criminal division head Leslie] Caldwell's message in the talks was stern: UBS was a recidivist having previously settled with the Justice Department over antitrust violations and had also obtained a deferred-prosecution agreement in 2009 to resolve charges it helped American taxpayers hide money overseas."

Sure enough, UBS is shocked, shocked to find out there was criminal gambling going on in its world's largest trading floor in Stamford, CT which is on its way to becoming a mini golf course. And again. And again.

UBS officials are confounded by the outcome, some of the people familiar with the negotiations said. The bank believes it provided early cooperation which helped prosecutors break open the foreign-exchange investigations and, as a result, was promised immunity by the antitrust division of the Justice Department.

 

But for prosecutors the punishment is seen as justified, the people said: The bank promised not to break the law in its 2012 deal and it violated those terms when its traders engaged in the currency-market misconduct after the 2012 agreement, they said. Prosecutors have been investigating whether traders colluded to move currency rates to benefit themselves to the detriment of clients.

We too would be shocked to learn that ratting out all our former peers and colleagues doesn't pay off in the end.

The WSJ also adds, "the negotiations with the Justice Department are expected next week to result in UBS paying a fine of about $200 million to the Justice Department and pleading guilty to allegations that UBS traders manipulated the London interbank offered rate, or Libor, prior to 2012, according to some of the people."

While the fine is paltry, the guilty plea will open the bank to a myriad of lawsuits from around the globe, which will surely result in billions of new recurring, non one-time "one-time, non recurring" legal fees, charges and further settlements as UBS is now open to litigation by anyone and everyone.

And while we applaud the DO"J" for doing its job for once, will it be too much just once not to assume everyone is an idiot and that clearly the DO"J" has a bias against foreign banks who are used as a buffer to avoid prosecution of domestic banks, which have mysteriously gotten away with virtually every criminal act known to man and mafia.

Such as JP Morgan for example. The same JP Morgan whose luck may have run out, because according to the WSJ, in addition to UBS, Barclays, Citigroup, RBS, and J.P. Morgan "are expected to plead guilty to criminal antitrust charges and pay between $500 million and more than $1 billion in penalties to various government entities, according to company disclosures and people familiar with the talks. On Thursday, J.P. Morgan disclosed in a financial filing that “any resolution acceptable to DOJ would require that the Firm plead guilty to an antitrust charge.

Curiously, it is none other than JPMorgan who courtesy of Troy Rohrbaugh happens to be the Chairman of the Fed's Foreign Exchange Committee.

 

We are confident, however, that JPMorgan admiting guilt to a criminal anti-trust FX rigging charge will have zero impact on, and no conflicts of interest whatsoever with it remaining head advisor to the NY Fed on all issues FX.

And while there are several things we can be absolutely certain of i) the banks will pay a few more billion in settlements here and there, and maybe UBS will be barred from competing with Goldman and JPM in fields in which the US banks feel there is "too much competition" (because a Lehman-type raid on a key competitor would not quite work out just now), and ii) nobody will actually go to prison, we have one question: just which umbrella agreement with US prosecutors will UBS use for that "other other other" market UBS was most recently caught rigging: gold.

Actually, if UBS made the price of gold drop with its gold-rigging, it may well be that the Swiss bank just may get a commendation by the US DO"J" for that one.

 

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Fri, 05/15/2015 - 01:33 | 6096111 TruxtonSpangler
TruxtonSpangler's picture

The rats are starting to turn on each other

Fri, 05/15/2015 - 01:38 | 6096120 TruxtonSpangler
TruxtonSpangler's picture

"Cannibalism can occur in nature for a variety of reasons. In most small mammals (bankers, politicians and mobsters) cannibalism is most likely to occur when money is scarce, and the drive for self-preservation kicks in. After accepting the latest bonus, the banker may realize that resources are scarce and cannibalize the others to reduce the number of mouths to pay."

http://www.petplace.com/article/small-mammals/general/when-your-small-ma...

Fri, 05/15/2015 - 01:43 | 6096128 DontGive
DontGive's picture

But not before they make a penis hat out of eachother. With their mouths.

Fri, 05/15/2015 - 01:45 | 6096132 Intelligence_In...
Intelligence_Insulter's picture

Excellent comment. plus one douchbag

Fri, 05/15/2015 - 04:51 | 6096280 MonetaryApostate
MonetaryApostate's picture

There will be no peace until justice is served.... (All the way to BOE / HSBC / etc)

Fri, 05/15/2015 - 05:11 | 6096284 cnmcdee
cnmcdee's picture

Sickening the Goldman Sachs gang the Whitehouse administration and their minion intelligence agencies have 330 million people hostage right now.. 

Fri, 05/15/2015 - 07:49 | 6096473 JRobby
JRobby's picture

The Stockholm Syndrome is wearing thin. The hostages are ready to revolt.

Fri, 05/15/2015 - 08:09 | 6096511 Latina Lover
Latina Lover's picture

The Swiss are learning, just like the Russians, Libyans, Iraqi's, Afghani's, etc etc that the word of the USSA government can never be trusted.

Fri, 05/15/2015 - 04:16 | 6096247 OldPhart
OldPhart's picture

The proper abbreviation us DOJU, not DO"J".  It's the Department of Just Us.

Fri, 05/15/2015 - 08:28 | 6096576 booboo
booboo's picture

That teach them fuckers, if they want to be in the club they need to buy some senators and hire their wives from the team wearing blue jerseys too.
Stupid fucks, get with the program, chop chop.

Fri, 05/15/2015 - 01:40 | 6096125 Intelligence_In...
Intelligence_Insulter's picture

I aint never going back.

Fri, 05/15/2015 - 01:41 | 6096126 Atomizer
Atomizer's picture

The SEC is playing angry birds on new apple watch. 

Fri, 05/15/2015 - 04:05 | 6096226 MonetaryApostate
MonetaryApostate's picture

Thieves are funny, especially when there are only a few pebbles left in a pond to steal....

Fri, 05/15/2015 - 01:48 | 6096134 Your guess is a...
Your guess is as good as mine's picture

Tomorrow I'm taking the girlfriend out to finally meet my parents, it's quite a nerve racking thought for anyone, let alone for a guy whose girlfriend fucks people for money.

I can just imagine the look of disgust on my dad's face when I tell him she works for UBS.

Fri, 05/15/2015 - 07:22 | 6096428 shovelhead
shovelhead's picture

Tell him she just a fluffer, so that's ok.

Fri, 05/15/2015 - 02:00 | 6096142 ymom11
ymom11's picture

Another fine.  Prosecute the coorporation.  It's a "person" isn't it? 

Fri, 05/15/2015 - 02:14 | 6096150 disabledvet
disabledvet's picture

In other news a bid rigging scandal in Washington erupted after it was discovered that...

Fri, 05/15/2015 - 04:06 | 6096229 MonetaryApostate
MonetaryApostate's picture

All fines leveled against Government Institutions are paid by THE TAX PAYERS...

Wake up, YOU CANNOT WIN.

Fri, 05/15/2015 - 04:18 | 6096250 OldPhart
OldPhart's picture

Yep.  And as a person it can be convicted and sentenced to prison for a long stretch of time. (wait a sec...)

Fri, 05/15/2015 - 02:36 | 6096167 Oh regional Indian
Oh regional Indian's picture

UNION bank......hmmmmm......says something right there, ne?

+, this is all for the sheep.

The way banks get punished: Here, Make 50 billion and give us 3 Billion in fines.

System has been set up to suck, fuck and then tuck the sheep to sleep!

Memories of days past, 5 years ago, what is different?

https://aadivaahan.wordpress.com/2010/12/12/backwards-mercury-and-other-...

 

Fri, 05/15/2015 - 02:49 | 6096176 pgroup
pgroup's picture

When Christ was teaching the devil about the facts of life, he said, "It is written."

UBS should have studied Scripture and GOTTEN IT IN WRITING.

Fri, 05/15/2015 - 02:57 | 6096179 williambanzai7
williambanzai7's picture

See what happens when you stop making protection payments to that sewer rat Phil Gramm.

Fri, 05/15/2015 - 05:29 | 6096304 crashguru
crashguru's picture

This is just the usual show for the US sheeple. If "UBS" would have ordered to kill Obama, would they punish "UBS" or the guy(s) who gave the order? 

Fri, 05/15/2015 - 05:33 | 6096310 seek
seek's picture

You trusted the government? I think I found your problem, UBS.

Fri, 05/15/2015 - 06:19 | 6096345 FlacoGee
FlacoGee's picture

These are just recurring "Non-Recurring Legal Fees".

Cost of doing business niggas.

Fri, 05/15/2015 - 06:34 | 6096361 goldenbuddha454
goldenbuddha454's picture

Everyone knows ratting out fellow criminals won't buy you immunity.  It takes cash given to political campaigns and greasing the right people!  Come on Man!

Fri, 05/15/2015 - 06:35 | 6096364 doctor10
doctor10's picture

they didn't understand what the plain white envelope they were given as they left the room with the Clinton's home address on it was really for?

Fri, 05/15/2015 - 07:17 | 6096417 Fun Facts
Fun Facts's picture

What the world would look like if usurped by a satanic cult that controls the money and the media for $1000 please.

Fri, 05/15/2015 - 07:26 | 6096433 shovelhead
shovelhead's picture

Satan can only wish these guys worked for him.

They see Satan as small potatos.

Fri, 05/15/2015 - 07:52 | 6096479 JRobby
JRobby's picture

No friend, they DO work for him. Understand that and the fight becomes pure and righteous.

Fri, 05/15/2015 - 07:21 | 6096423 Atomizer
Atomizer's picture

Can we get the video of interrogation? 

Fri, 05/15/2015 - 07:24 | 6096430 Jack4952
Jack4952's picture

SO WHAT ?????

UBS will simply be required to pay another fine to the U.S. government.

How about prosecuting the CEO and senior executives of UBS? And if found "guilty", they should pay large personal fines, plus serve time in prison !!!

Until that happens, the U.S. government (via the DOJ) is simply "milking the cash cow" (UBS, JP Morgan, HSBC, etc.) to solve its own financial problems.

Fri, 05/15/2015 - 08:32 | 6096591 22winmag
22winmag's picture

There will be no justice until Holder is perp walked on national television sporting his new orange suit.

 

Remember, he was Reno's waterboy during Waco.

Fri, 05/15/2015 - 10:21 | 6097062 Herodotus
Herodotus's picture

UBS needs to close all of their operations in the USA and just walk away.

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