14th Mar 2014 09:47
LONDON (Alliance News) - The Hong Kong Monetary Authority Friday said it has found evidence of misconduct by UBS AG traders in the submission of Hong Kong interbank offered rate rates (HIBOR) but found no evidence of collusion among it and eight other banks.
The Hong Kong Monetary Authority launched its investigation into UBS in December 2012, later adding eight other banks: Bank of Tokyo-Mitsubishi UFJ, Citibank, Crédit Agricole Corporate and Investment Bank, Deutsche Bank, HSBC PLC, JPMorgan Chase Bank, Royal Bank of Scotland Group PLC and Société Générale.
It said on Friday that it had found evidence of misconduct only at UBS, and none of the others, as well as no evidence of collusion between the banks to rig the HIBOR fixing.
The investigation of UBS found that between September 2006 and June 2009, six traders and the HIBOR submitter of the bank, who have all since left the bank, sent about 100 internal chat messages that contained change requests with a view to rigging the bank?s submissions for the HIBOR fixing.
"There is evidence that about one-third of these change requests affected the Hibor fixing rates submitted by UBS. For the remaining two-thirds, there is no evidence to suggest that the outcome of the HIBOR fixing was impacted. According to the HKMA?s estimate, the UBS change requests had negligible impact on the actual outcome of the HIBOR fixing," the Hong Kong Monetary Authority said in a statement.
In October 2010, UBS ceased to be a HIBOR reference bank and no longer makes submissions for the Hibor fixing.
The investigation found that UBS failed to report staff misconduct when it became aware of the activities.
It also found "material weakness" in the Swiss bank's internal controls and governance in managing the Hibor submission process.
The HIBOR fixing is the latest scandal to affect UBS, which has paid CHF1.4 billion in fines to US, UK and Swiss authorities in December 2012 in relation to its role in the LIBOR rate-rigging scandal.
By Samuel Agini; [email protected]; @samuelagini
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