UBS, Citi Under Fire in Japan (UBS, C)
Japan’s Securities and Exchange Surveillance Committee, the watchdog organization for the country’s Financial Services Agency, is seeking penalties against the country’s units of UBS AG (NYSE: UBS) and Citigroup Inc. (NYSE: C) for the actions of a trader accused of…
Japan’s Securities and Exchange Surveillance Committee, the watchdog organization for the country’s Financial Services Agency, is seeking penalties against the country’s units of UBS AG (NYSE: UBS) and Citigroup Inc. (NYSE: C) for the actions of a trader accused of trying to influence short-term interest rates.
According to a report from CNBC,
The Securities and Exchange Surveillance Commission said a trader in his 30s lobbied other banks to offer higher or lower rates to move the Tokyo interbank offered rate, or Tibor, to the advantage of his derivatives trading.
His attempt to influence Tibor started around March 2007 at UBS Securities Japan and continued when he left the firm and joined Citigroup Global Markets Japan in 2009, the SESC said, adding Citi fired the trader in September 2010 after the improper practice was found.
At Citi, the trader’s boss was also found to have been involved in the rate-influence attempt, the SESC said.
The SESC said it did not find that Tibor was influenced as the result of the attempts.
Both banks said they would cooperate fully with regulators, who could levy a stiff penalty including a several-month suspension of operations.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
