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UBS faces $1.5 billion day of reckoning over rate rigging

Dec 17 2012 Huw Jones, Reuters

UBS AG will pay around $1.5 billion to settle charges that a group of traders at its Japanese unit rigged Libor interest rates, a source familiar with the matter said on Monday as the Swiss bank prepares for a deal with regulators. The fine, to be imposed by the United States and Britain, would be the latest blow to UBS after a $2.3-billion rogue trading loss in London last year, a $780-million fine after a U.S. tax investigation in 2009 and its near collapse in 2008 under the weight of losses on U.S. sub-prime mortgage lending. UBS will admit that roughly 36 of its traders around the globe manipulated yen Libor between 2005 and 2010, according to the source, with a final deal not expected before Wednesday. The source said settlement talks are now centering on a fine in the region of $1.5 billion - somewhat higher than source were predicting last week and three times the $450 million levied on British bank Barclays Plc in June for similar manipulation of benchmark interest

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