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Morning Coffee: Libor Scandal Now a People Problem

The Libor rate-fixing scandal gets uglier and more complex with each passing day. Not only will UBS be forced to admit culpability, agreeing to pay as much as $1.6 billion for illegally massaging interest rates, the firm will also see dozens of its bankers and managers implicated as part of the deal.

Details from the upcoming settlement are still murky, but Financial Times is reporting that roughly three dozen UBS staffers will be implicated, with an unknown number expected to face criminal or civil charges. At the heart of the investigation is a UBS Japanese securities subsidiary, which will reportedly plead guilty to a criminal offense for manipulating yen Libor and euroyen contracts, although Reuters reports that the UBS settlement could include acknowledgement of the manipulation of other currencies as well.

With the blame likely falling on one of its subsidiaries, UBS may be able to avoid severe ramifications that can accompany admission of criminal guilt, including license suspensions.

The news follows the arrests of three British bankers for their role in the scandal. Clearly, the Libor fiasco is no longer just a bank issue; it’s quickly morphed into a banker issue. And with potential fines skyrocketing, and bonuses at risk, employees who had nothing to do with the rate-fixing will likely be affected.

More to come.

Healthier than Ever (WSJ)

Jefferies Group, once a potential target for layoffs, posted a strong fourth quarter performance on Tuesday, with earnings up 48% compared to the same period a year earlier. The firm was recently acquired by holding company Leucadia, a move that some believe enabled Jefferies to retain its full staff. The company now seems poised for growth.

Out-of-Work and Looking (eFinancialCareers)

Experienced out-of-work bankers often struggle to find new work. Looking for a strategy role at the corporate level or targeting boutiques and advisory houses are often the best ways to rejoin the workforce.

Shallow Pool (eFinancialCareers)

The bonus pool at Deutsche Bank could be cut anywhere from 30% to as much as 70% for senior staff. “The bonus pool is going to be slashed,” one headhunter told eFC.

More Drama (Financial News)

Lawmakers have accused Deutsche Bank co-CEO Jürgen Fitschen of attempting to undermine the judicial process by reportedly asking a German official to protest last week’s police raid of Deutsche Bank’s headquarters. The raid was the latest highlight in a long-running tax fraud investigation.

Ties, Booze and Books (Business Insider)

Most Wall Street execs will see smaller year-end bonuses this year. With that in mind, here are 17 gifts tailored to finance pros that may cheer them up. At least a little.

Caps Being Met (Reuters)

Upcoming stress tests will show that U.S. banks like Citi and Bank of America are adequately capitalized, says Wall Street analyst Meredith Whitney. Meeting cap requirements is a good omen, especially when it comes to avoiding additional layoffs.

Retraction (Business Insider)

Friendly reminder to colleagues: If you make public comments about Warren Buffett, make sure to get your facts straight. Otherwise you’re bound to receive a correction from the man himself. And it may even include a document from 30 years ago proving you wrong.

Buzz Around the Office

In This Economy…(Digital Spy)

Unwilling to fork over the money needed to cover a baggage fee, an airline passenger in China opened his suitcase and put on every garment in the bag: 60 shirts and nine pairs of jeans. He then set off the metal detector and had to disrobe for a full body search.

List of the Day: Bad Performance Review

Receiving a bad performance review can be a sinking feeling. When it happens to you, don’t sulk. Do this.

  1. Be self-critical. Are you culpable?
  2. Ask a boss or colleague for tips on improving.
  3. Check in with superiors on your progress.

(Source: The Daily Muse)

AUTHORBeecher Tuttle US Editor

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