UBS has been ordered to pay $388 million (CHF336 million) to British and US regulators over Credit Suisse’s dealings with private investment firm Archegos Capital Management, the Swiss bank said on Monday.
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UBS concorda em pagar US$ 388 milhões por falhas na Archegos do Credit Suisse
The settlement is the first of several that UBS could have to pay after it last month closed its takeover of rival Credit Suisse, which was involved in a number of legal battles.
Under the agreement, UBS is to pay the US Federal Reserve $268.5 million and the UK’s Prudential Regulation Authority £87 million (CHF97 million).
Reports ahead of time had suggested the US regulator would impose a penalty of up to $300 million and the UK regulator would fine UBS up to £100 million over the bank’s dealings with bankrupt US hedge fund Archegos.
UBS on Monday said it would tighten up operational and risk management discipline at Credit Suisse after it completed its takeover of its smaller rival.
The bank also said it intended to resolve Credit Suisse’s remaining litigation in “the best interest of its stakeholders, including investors, clients and employees”.
UBS said in May, just before completing the deal, that it was setting aside $4 billion for potential lawsuits connected to its Credit Suisse takeover.
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Let’s Talk: What next after the Credit Suisse debacle?
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The Let’s Talk debate webcast examines the implications of the Credit Suisse failure for Switzerland and its financial centre.
Although unable to levy fines, Swiss financial regulator FINMA has ordered corrective measures in the wake of the Archegos affair, including changes to the bank’s compensation culture that take more account of risk appetite.
“For employees with particular risk exposure, a control function must assess and record the risks taken before the bonus is determined,” FINMA said in a statementExternal link.
“UBS already has corresponding rules in place, which FINMA is now ordering to be legally binding,” it added.
The regulator said it has also opened enforcement proceedings against an unnamed former Credit Suisse banker linked to the affair.
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FINMA probes Credit Suisse over Archegos blowout
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Switzerland’s Financial Market Supervisory Authority (FINMA) on Thursday opened enforcement proceedings against the bank over the Archegos losses. The regulator is investigating whether there were deficiencies in risk management. FINMA has appointed an investigator to probe the matter at the bank. It is also exchanging information with counterparts in Britain and the United States. The…
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