Zurich: Six former UBS managers and traders have been banned for up to five years for alleged manipulation of foreign exchange and precious metals markets in the first sanctions handed out by authorities in a global investigation.
Swiss financial watchdog FINMA yesterday said the six, who were not named, were directly responsible for serious breaches of regulation and had been banned for between one and five years for failings related to currency and precious metals trading.
FINMA has stolen a march on worldwide criminal and regulatory peers, which are also investigating individuals for alleged misconduct in the $5 trillion-a-day currency market after seven banks were fined around $10 billion and four lenders pleaded guilty to attempted market
manipulation.
“Traders shared confidential client information, sometimes revealing the identity of clients to third parties, deliberately triggered stop-loss orders and engaged in front running,” FINMA said in a statement.
The traders repeatedly attempted to manipulate foreign exchange benchmarks, it said, while managers failed to adequately control and monitor chatroom conversations.
“Those responsible for the management of foreign exchange trading tolerated, and at times encouraged, behaviour which was improper and against the interests of clients,” FINMA said.
FINMA, which has been investigating 11 UBS staff since November 2014, did not name the six it has now banned, which is common practice in Switzerland due to strict
privacy rules.
It said only it had banned the former heads of global foreign exchange trading and global foreign exchange spot trading from holding senior management positions at FINMA–supervised firms for four and five years respectively.
It banned four traders in foreign exchange and precious metals from the bank’s spot trading desk in Opfikon, a municipality in the Swiss canton of Zurich, for at least one year each.
The watchdog, which in August dropped proceedings against four other UBS foreign exchange traders, is still considering action against one other individual.
UBS is one of the seven European and US banks to have been fined over currency market rigging after US and UK authorities described how traders gathered in chatrooms with names such as “The Cartel” and “The Mafia” to share confidential client information and co-ordinate trades to boost their own profits between 2008
and 2013.
UBS paid $545 million in May to settle regulatory investigations into both currency and interest rate manipulation.
Regulatory investigations into individuals elsewhere continue. In Britain, criminal proceedings take precedence over civil action.
To date, there has been one British arrest. Paul Nash, a former Royal Bank of Scotland foreign exchange trader, was arrested at the end of last year shortly before he planned to emigrate to Canada.
Meanwhile, UBS yesterday said it had successfully completed a previously announced cash tender offer to buy back senior, subordinated debt and covered bonds worth about $16.08bn as it seeks to benefit from lower interest rates.
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