Zurich headquartered UBS said it is in advanced talks with the U.S. Department of Justice (DoJ) to settle allegations of foreign exchange market rigging, as Switzerland’s biggest bank posted its highest quarterly profit in nearly five years. So, now is as good as time as any to settle right?
A settlement with the DoJ probe would be the latest such case, as banks around the world have been under fire since last year for allegedly manipulating the $5 trillion a day FX market. Regulators have already fined six major banks including UBS a total of $4.3 billion for failing to stop traders from trying to manipulate the forex market.
Sources told Reuters last week the DoJ and five major banks including UBS were on course to reach multi-billion dollar agreements as soon as the second half of May. Last week we learned that Barclay’s had set aside more funds to handle it’s own allegations and settlement. Furthermore, Royal Bank of Scotland had increased it’s allotment of legal funds to deal with Forex manipulation fines coming down the pike.
The report revealed that UBS lowered its litigation reserves to 2.7 billion francs from 3.05 billion and said it believed reserves were adequate to deal with the forex probe settlement, but noted “substantial uncertainty” surrounding the outcome.