UBS Gets Probation For Rigging $5 Trillion-A-Day FX Market

Tyler Durden's picture

UBS was “confounded” last week when the Justice Department decided to void a 2012 agreement under which the bank would escape prosecution for its role in manipulating the world’s most important benchmark rate in exchange for ratting out its FX rigging co-conspirators. 

As a reminder, the DoJ is set to extract guilty pleas from a number of TBTF bank logos sometime in the supposedly near future (reportedly later today). The settlements were supposed to have been announced last week but because that didn’t give banks enough time to negotiate all of the fine print and SEC waivers that will serve to strip the agreements of any and all meaning, the announcements had to be postponed.

As we’ve outlined on several occasions this month, JP Morgan, Citi, Barclays, and RBS will almost certainly be allowed to skirt punishments that should by law accompany their guilty pleas including provisions that make it more cumbersome to raise capital and limit participation in private placements. Those inconveniences, the banks say, would pose a systemic risk and so must be avoided at all costs if they agree to admit to rigging forex markets. 

For UBS, whose assistance was supposedly key to the FX rigging investigation, the squealing rat reputation isn’t completely for naught after all because as you can see from the below, the bank will pay just $342 million to the Fed for rigging FX markets “engaging in unsound business practices” (and nothing to the DoJ), $203 million to the Justice Department in connection with rigging LIBOR, and plead guilty to one count of wire fraud.

Via WSJ:

UBS will plead guilty to wire fraud and pay a fresh $203 million fine related to the Libor case. In addition, the bank will pay a $342 million penalty to the U.S. Federal Reserve, for “engaging in unsound business practices” related to its foreign-exchange business.


The Wall Street Journal previously reported that U.S. prosecutors took into account UBS’s promise not to break the law in its 2012 nonprosecution agreement for Libor, and believed misconduct by bank’s employees trading in foreign currencies violated those terms.

So while UBS may still be confused as to why rigging forex markets counts as a violation of an agreement that originally came about because the bank manipulated LIBOR with the same other banks with which it conspired on the currency shenanigans, one thing is clear: $545 million is a great deal.

Here’s Reuters:

The Swiss bank's payment is part of what is expected to be a combined $5 billion settlement by five of the world's biggest banks with U.S. and British authorities over alleged manipulation of the $5-trillion-a-day forex market…


The bank said the new fines, which were much lower than expected, would not affect its earnings. The bank's shares rose over 2 percent in early trade in a relief rally.


“It couldn’t have been better ... Most of it was already priced in but something around $1 billion was expected, including the Libor fee,” Andreas Brun, an analyst with Zuercher Kantonalbank, said.

Just in case the above isn’t clear enough…

*  *  *

And the punchline:

The bank is now under a three year "probation" period with the DOJ.

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Oldwood's picture

Paying the vig

silver_stacker's picture

crony capitalism socialism at it's finest...

Arius.'s picture

Big news from a pro on the subject .....Soros sees risk of another world war

MonetaryApostate's picture

We need more Bin Ladens... (American Bin Ladens), forget the DOJ, we need a The People's Justice Department.... :D

ThroxxOfVron's picture

Pure Corporatism.

Pleading guilty to International Wire Fraud would put an ordinary person behind bars for years and fuck their whole life afterwards.

Took Red Pill's picture

Not surprised. When will any of these bankers go to jail?

Usurious's picture
Usurious (not verified) Took Red Pill May 20, 2015 7:15 AM

bankers dont put bankers in jail.........

the gov is the bank and the bank is the gov........

Majestic12's picture

"When will any of these bankers go to jail?"

When will we see them hanging headless from spikes like their paid ISIS shills do to others in Syria?

Arnold's picture

Out fucking outrageous.

Oldwood's picture

Different rules for different folks. It is a race to become part of the protected class, the Too Important To Fail. If you are a belligerent biker at a scene where cops kill your friends, you all can be charged with murder. But if you are a cop and kill someone because they fail to obey, you might lose a weeks pay.

You are either part of the protected class or you are the little people who's responsibility is to work and pay and obey.

Jeff Cosford's picture

OK I'm thinkin biker is a poor choice for sympathetic comparison. Those fuckers are vicious. Now busting someone because they are feeding the poor or siezing a family of 10 kids and putting in foster carea and the parents in jail for home schooling is were the rubber meets the road. I'd like to see some of those goverment folk strung up as it were.

williambanzai7's picture

$342 million paid to the printer...

Not paid to compensate anyone, just paid back to the money printer.

They are all criminal racketerring enterprises and should be RICO'd

Oldwood's picture

Lots of reasons to be pissed but you bring up a good point...where does this money go? Does it go to general revenue, or does it go into specific "budgets" much like law enforcement keeps their ill gotten gains from seizures?

williambanzai7's picture


It's just treated as a pile of chips on a poker table.



Took Red Pill's picture

The fine goes to the Fed! It should go to the people who got screwed!

SillySalesmanQuestion's picture

+1 Thanks for making my point Banzai and Red Pill. Is that the skim, commission, fee to the FED, instead of redistribution to frauded investors....!? WTF.

williambanzai7's picture

My most simplified rant is this:

The FED is owned not by the US gov'y but by the TBTF banks.

Why the fuck are we allowing them to pay themselves the fines levied for their crimes.

I am missing something here?

Next: Putting aside the lack of jail time, why aren't the perps banned forever from employment by a bank? They just wind up playing musical TBTF chairs and rewriting their resumes.

Move On folks...

Monetas's picture
Monetas (not verified) williambanzai7 May 20, 2015 7:43 AM

Stick to your pictures .... you're breaking the enchantment ! LOL

falak pema's picture

pictures and logic go hand in hand and damn the enchantment of "hidden hand"...

Kayman's picture

Dirty little grasping manicured hands on every criminal banker. They piss on your leg and laugh in your face. Jail ?  Why that's for the little people...

rejected's picture

The Dept of Justus just recently slapped the hands of four Cancer organizations for ripping off the donations. One of them was a childrens fund.  From what I gather they had their hands slapped and some told they could not participate in these types of scams.No jail time that I am aware of.

It's as if anyone who steals "BIG" is ok while the little thieves go to jail. I guess soon they'll have to be fair and let them all go free.

What the hells going on!  Chicago mobster Al Capone today would have had a tiny fine, slapped on the wrist and turned loose. He lived in the wrong time.

Jeff Cosford's picture

It's a savings account for UBS. @ the FED so they make em save money for a rainy day. You know director retirement. Bilderberg junket. Stuff that are a benefit to us all. Maybe sp Bilderberg wrong but oh well. Anyway important stuff. I mean these guys trim the homes and offices in gold leaf. That stuff aint cheap I dont care what anyone says about the price of gold. So they prob buy the stuff in bulk so everyone has got to chip into the pot. The FED is there club house. al la spanky and the gang.

shovelhead's picture

I have yet to receive my check.

Dubaibanker's picture

Trade licence of any corporation is issued as a condition to follow the law.

But only in the banana republic of US, is a violation of law as well as cheating to make money by a corporation treated as lightly.

Writing insults on Facebook will probably get you a longer jail time. Feeding the homeless too! Kicking a go to jail for life....shooting a black man, especially unarmed, is now considered a well respected sport ...while cheating the whole nation of consumers.....that's another thing altogether.

Is US a real country or a game of Monopoly?

With fake money...get out of jail cards .... the bank can 'never go broke' and can print as much as it wants.....

Kayman's picture


Actually banks, including Central Banks, can go broke; but first they break the country.

Hanging for treason is the only remedy.

wmbz's picture

Wow, I am suprised they were that "tough" on them. Must be trying to set an example for other neerdowells!


Complete fucking joke!

Oldwood's picture

Simply inflation in the participation fees.

Handful of Dust's picture

take a joy ride get 5 years in jail...manipuate illegally trillions get probation.

disabledvet's picture

Sounds like Europe better start praying six times a day!

eddiebe's picture

Now, if someone really cared enough to actually do something about any of this. I, like most of us here are relegated to the pathetic role of bitchez.

Remember Oppose Wall Street. I somehow couldn't be bothered.

rejected's picture

If a group of people on their own decided to punish criminals like these they would be called a 'mob'.

So, what do call the trash in the Dept of Justus?

BeaverCream's picture

I don't know why you're all so is great... Kim Kardashian has a big booty and some footballs games are on tonight.

firstdivision's picture

How come if I were to plead guilty to wire fraud, I go to jail?  When is UBS going to jail?

gwar5's picture

Whiskey Tango Foxtrot??!

overmedicatedundersexed's picture

and corzine gets his advisor's pay, the playbook after enron, ever wonder why  K lay and J skilling, got jail? never happen today.

Hubbs's picture

Dean Wormer:  "Delta (UBS), I am putting you on double secret probation."

Calculus99's picture

And the futures trader Nav stays in jail, bail refused because he's a flight risk. 

if you're small and mess with the  Federal government you're in a whole load of shit. They took all Kim Dotcom's money BEFORE any trial.

Got to hand it to them however, because their propaganda is good at tricking the majority 'we're the good guys, trust us, look we even shed a tear when they play America the Beautiful'. 

Sach Mahoney's picture

....and who is going to jail for these crimes?  Nobody.  It's once again the innocent shareholders taking the hit for the corruption, while the "team" remains intact.  Nothing to see here, move along. 

Monetas's picture
Monetas (not verified) May 20, 2015 7:36 AM

Banks mimic Keynesian state .... and get punished for it ?

Kayman's picture

TBTF banks don't mimic the Keynesian state. They are the Keynesian state. After 7 years of ZIRP, NIRP and buying all bonds do you see any change in aggregate demand in the economy? Hell no. But it sure has been good for bankers and their ilk.

falak pema's picture

Reminds me of the movie Mississippi Burning. 

The first hooded white knights of black man's lynch furor as local back-lash in the movie centered around a federal police investigation into the disappearance of three young "marchers for freedom", were declared guilty by the court for "conspiracy to harm free citizens", then sentenced to 5 years in prison--with suspended sentences.

Justice was "done" but never "executed".

From raycisss days of the 60s to lawless days of the 2010s what has changed ?

Justice is still a "kept woman" in chains ! 


rejected's picture

Outstanding! Managed to get rayscism in the discussion.

22winmag's picture

Most criminals operate at night or at least try to hide their faces.


These criminal cocksuckers operate in broad daylight in full view of the DOJ and SEC.


Must be nice.

Anunnaki's picture

Did Jamie D wear his Presidential cufflinks when he signed his "penalty" check?

MFL8240's picture

Fraud is a wonderful thing for the connected!

Pumpkin's picture

Sometimes you just have to thank Almighty God for the greater judgment.

Crocodile's picture

Sadly, many if not most, will be spending eternity with the very people they hated such as the bankers and politicians due to disobeying the command from the "Creator in Chief" to repent and believe in the person and work of Jesus on THEIR behalf.  Breaks my heart to witness the self-destruction of so many as they earn their place in hell, for the wages ( a thing earned) of sin is eternal death.  God sends no one to hell; they earn it, but He does put many barriers in their way to prevent it, but people love the darkness because their deeds are evil and that continually and because it is darkness, they are blind to it.

shovelhead's picture

Tough luck, you fundie prots.

Catholics can buy a free pass. An eschatological "Get out of jail Free Card".

Nanner nanner.

Fun Facts's picture

The zio banking syndicate operates above all laws and murders anyone who gets in their way.