UBS Group AG (NYSE:UBS) rose in New York trading as Switzerland’s largest bank will pay lower-than-expected $545 million to U.S. authorities to end an investigation into alleged manipulation of currency and interest rates.
Shares rose 3.6 percent to $21.88 at 10:27 a.m. in New York. The stock has gained 28 percent so far this year.
The lender’s main unit, UBS AG, will plead guilty to fraud for manipulating benchmark interest rates and pay $203 million in fines after the Swiss bank violated an agreement that had allowed it to avoid prosecution, Zurich-based UBS said in a statement today.
In the currency case, UBS said it will pay $342 million to the Federal Reserve, which regulates foreign banks, and undertake remedial measures. It won immunity for cooperating in a parallel antitrust probe, sparing the bank possible fines and felony charges on that score.
UBS’s guilty plea raises the prospect of the bank having to seek permission from U.S. regulators to keep operating in certain lines of business, including managing mutual funds and pensions for Americans.
UBS said it expected no financial impact on its results for the second quarter as a result of today’s settlements.
The fines for UBS are the first of what is expected to be a wave of settlements today between big banks and U.S. regulators over alleged manipulation of foreign-exchange markets.
Banks have sought to avoid criminal charges, which can add complications to their businesses. UBS rival Credit Suisse Group AG, pleaded guilty last year to a charge of aiding U.S. tax evasion by providing undeclared Swiss bank accounts to American clients. Credit Suisse has experienced some wrinkles in its U.S. businesses as a result of the plea, related to its ability to manage money for pension funds and to quickly raise capital.
French bank BNP Paribas SA pleaded guilty last year to dealings with sanctioned countries.
Citigroup, JPMorgan Chase, British banking giant Barclays and Royal Bank of Scotland similarly are expected to enter guilty pleas to criminal antitrust charges later today as one part of broad settlements with the U.S. Department of Justice and other U.S. and overseas authorities and regulators.