Tuesday’s Headlines: Once-secretive UBS takes advantage of whistle-blower discount in LIBOR price-fixing case

When EU regulators began investigating the LIBOR price-fixing case, financial institutions saw the writing on the wall: big fines were on the way. Now that UBS has become the first whistle-blower in the case, this means the Swiss bank will likely enjoy lower fines, while upping the pressure on its rivals to do the same, according to a Businessweek article.

The article states: Since 2002, the EU has waived fines for the first company to come clean in a price-fixing cartel. The maximum fine for members of a cartel under European rules is 10 percent of sales. UBS is cooperating with Britain’s Financial Services Authority’s probe of potential market abuse and controls and is likely to receive the standard 30 percent discount on any financial penalty for early settlement. By making the first disclosure to regulators, the Zurich- based lender will make it harder for competitors including JPMorgan Chase & Co. and Citigroup Inc. to claim similar protection. UBS’s competitors could face higher penalties for not coming forward earlier.

The story went on to quote a law professor who said the fines “could be enormous, depending on how they’re defined. It will be a mess evaluating damages given all the derivatives contracts and swaps tied to these rates. This won’t be resolved anytime soon.”

 

Other News:

BofA CEO Brian Moynihan will receive a 35 percent drop in restricted stock for his 2011 bonus. [WSJ]

Swiss banks are competing with U.S. institutions to lead M&A deals. [Bloomberg]

Firms such as LGT Capital and Lexington see an opportunity in secondary transactions in Asia. [Reuters]

The UK’s Chancellor of the Exchequer is considering looking outside the Bank of England for a successor to Mervyn King, which would be a first in 30 years. [Businessweek]

Commerzbank defends its bonus cut. [Bloomberg]

European private equity firm BC Partners raised one of the largest funds on the Continent since 2008. [DealBook]

Bank of Korea named a new member of its policy board, marking the beginning of an overhaul of its rate-setting committee. [WSJ]