The Libor scandal, settled by UBS over five years ago, continues to haunt the Swiss bank. A former UBS trader says the wrong-doing was signed off by higher-ups.
Years of rigging benchmark rates including Libor have cost big banks including UBS and Credit Suisse billions in fines. Several interest rate traders including Tom Hayes have been jailed, fined and banned from finance.
Another, less well-known figure is Arif Hussein, an ex-Libor trader who was banned by Britain's Financial Conduct Authority, or FCA, nearly two years ago.
Hussein has appealed the bank in court, arguing that Libor-rigging was not just tolerated at the Swiss bank – but ordered and sanctioned, according to court documents reported by news agency «Bloomberg».
Taking the Fall?
His lawyer portrayed Hussein as a junior trader taking a fall while other senior bankers who had allegedly set up the system for manipulation and oversaw it, had walked free.
«Hussein’s actions, from which he derived no personal benefit at all, were simply routine, in accordance with his employer’s policies and procedures,» lawyer Sara George argued in documents put to a London court.
Pawn vs. Fraudster
Hussein, whom the FCA accuses of attempting to rig the Libor rate in an online chat 21 times, is reversing an earlier stance. Two years ago, he admitted he had known the bank shouldn't be considering its own trading when it submitted Libor rates, and said the online messages were simply requests for the bank to hedge its positions internally.
UBS didn't comment on Hussein's case. The court must decide whether he is the proverbial pawn sacrificed by a big influential bank, or a criminal banker seeking reinstatement. Hayes, an autistic British man who worked at UBS, is seeking a reduction of his 11-year prison sentence.
