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After banning Paul White, a former a Japanese Yen (JPY) and Swiss Franc (CHF) LIBOR submitter at Royal Bank of Scotland Group plc (LON:RBS), the Financial Conduct Authority (FCA) today makes another move in relation to its investigation into LIBOR manipulation.
The UK regulator published a Decision Notice regarding Mr Arif Hussein, a former derivatives trader at UBS in London. The FCA finds that Mr Hussein is not a fit and proper person and announces its decision to prohibit him from any role in regulated financial services.
Mr Hussein disputes the FCA’s decision and has referred the matter to the Upper Tribunal. Accordingly, this decision notice has no effect pending the Tribunal’s ruling.
Mr Hussein was Head of UBS’s GBP Rates Desk where he traded interest rate derivative products referenced to benchmarks including GBP LIBOR. Between 28 January and 19 March 2009 Mr Hussein engaged in 21 communications in which he informed UBS’s GBP Trader-Submitters of his preferences (or, sometimes, his lack of a preference) for GBP LIBOR rates. Mr Hussein’s preferences were based upon his trading positions. During this period such communications were routine and they ended only when Mr Hussein resigned from UBS.
Mr Hussein ignored the risk that UBS’s GBP Trader-Submitters would use his preferences to influence the GBP LIBOR submissions they made on behalf of UBS, with the aim of benefitting his trading positions. Given this, the FCA found that he acted recklessly and so lacks integrity.
In December 2012, the FSA (the predecessor of the FCA) published a Final Notice against UBS and imposed on UBS a financial penalty of £160 million. The Final Notice stated that UBS had committed serious misconduct in respect of its LIBOR and EURIBOR submissions process.
You can view the full announcement from the FCA by clicking here.