UBS: Record Libor Fine, Criminal Charges, and Devastating Q4 Losses
UBS (NYSE:UBS) is finally taking its blows over the Libor rigging. The bank has settled with a $1.5 billion fine, representing the largest fine yet over the interest rate rigging.
Not only has the bank been getting dealt with on the anti-trust end of the law, it has been hit with criminal charges for wire fraud, making it the first big bank in a decade to agree to criminal charges. The guilty plea comes from a UBS subsidiary in Japan, where it is suspected most of the Libor rigging took place.
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CHEAT SHEET Analysis: Is this going to hurt UBS’s stock?
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UBS coming clean over the Libor scandal and supposedly turning over a new leaf might have been the best way to save face and instill confidence going forward, while the agreed $548 million for restructuring could improve future operations, but with an expected $2.7 billion net loss for Q4, shares are likely to take a hit. Also, simple statements on the matter from UBS staff might not be enough to wash clean the bank’s soiled reputation.
Other banks involved in the Libor and other rate-rigging scandals may face dropping shares if investors worry that the banks could also be facing steep fines and net losses.
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