Exclusive: UBS seeks first-mover immunity in U.S. currency probe - sources

Fri Feb 7, 2014 4:13pm EST
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By Jamie McGeever

LONDON (Reuters) - Swiss bank UBS AG UBSN.VX approached U.S. authorities in September with information relating to an industry-wide probe into alleged rigging of currency markets, in the hope of gaining antitrust immunity if charged with wrongdoing, sources familiar with the matter told Reuters.

UBS is seeking to take advantage of a program from the Justice Department's antitrust division under which the first company to report misconduct relating to a cartel can earn immunity from antitrust charges if it cooperates and provides information about other members of the group, three sources said.

Following the Libor interest-rate rigging scandal that has so far cost banks around the world $6 billion in fines and settlements, UBS sought to act quickly to gather and supply information when similar allegations of wrongdoing by leading banks in foreign exchange surfaced in June, the sources said.

No bank or individual has been accused of any wrongdoing but banks, including UBS, have said they are cooperating with regulators in the investigations. It is not known whether they too have sought first-mover advantage under the DoJ program.

UBS declined comment beyond pointing to a passage in its third-quarter results released in October, saying that after the June report of irregularities in forex markets, it had started an internal review.

"UBS and other financial institutions have received requests from various authorities relating to their foreign exchange businesses and UBS is cooperating with the authorities," the bank said in its results statement.

Authorities including the U.S. Department of Justice (DoJ), Britain's Financial Conduct Authority (FCA) and watchdogs in Germany and Switzerland are probing allegations of collusion between senior traders at big banks to manipulate benchmark currency rates.

These exchange rates or "fixes" are used to price trillions of dollars worth of investments and deals and are relied on by companies, investors and central banks globally.   Continued...

The logo of Swiss bank UBS is seen at a branch office in Zurich October 29, 2013. REUTERS/Arnd Wiegmann