Good morning – and thank you all for being here. Today, I’m joined by Assistant Attorney General Lanny Breuer, of the Justice Department’s Criminal Division; Deputy Assistant Attorney General Scott Hammond, of the Antitrust Division; David Meister, Director of Enforcement for the U.S. Commodity Futures Trading Commission; and Associate Deputy Director Kevin Perkins, of the FBI – as we announce the latest actions in our ongoing efforts to investigate and prosecute financial crimes – and to move both fairly and aggressively in bringing the perpetrators of these crimes to justice.
Today, the Justice Department is filing a criminal information charging UBS Securities Japan – a subsidiary of the multinational financial institution UBS AG – with felony wire fraud for engaging in a scheme to manipulate the London Interbank Offered Rate, or LIBOR – a key benchmark for financial products and transactions around the world. The company has agreed to plead guilty to this charge, to admit to its criminal conduct, and to pay a $100 million fine.
UBS AG – the parent company of UBS Japan – has agreed to pay a penalty of $400 million to the United States government; to admit and accept responsibility for its misconduct; and to continue cooperating with the Department’s ongoing investigation as part of a non-prosecution agreement. Combined with roughly $1 billion in regulatory penalties and disgorgement, these criminal fines and penalties bring today’s total resolution to approximately $1.5 billion. The non-prosecution agreement illustrates the significant steps that UBS has taken to help investigators uncover LIBOR misconduct, and to implement remedial measures strengthening the company’s internal controls. And it reflects the Department’s determination to rigorously enforce federal financial crime laws – and underscores our willingness to bring criminal charges under these laws when they are supported by the facts.
Additionally, in a separate complaint, two former UBS traders have been charged with conspiracy for their alleged roles in this scheme – which allowed UBS to boost its trading profits by placing bets on the movement of benchmark interest rates, and then manipulating those rates. One of these individuals has also been charged with wire fraud and an antitrust violation in connection with these activities.
By causing UBS and other financial institutions to spread false and misleading information about LIBOR, these alleged conspirators – and others at UBS – manipulated the benchmark interest rate upon which many consumer financial products – including credit cards, student loans, and mortgages – are frequently based. They defrauded the company’s counterparties of millionsof dollars. And they did so primarily to reap increased profits, and secure bigger bonuses, for themselves.
The prosecution we announce today is emblematic of the critical work that’s being led by the Financial Fraud Enforcement Task Force. Launched by President Obama in 2009 – in order to fight against fraud, manipulation, and other forms of criminal conduct in the financial sector – the Task Force represents the biggest and broadest coalition of investigators, law enforcement officials, and regulatory agencies ever assembled to combat fraud. I am honored to chair this group. And I’m proud of the progress it has enabled us to make – in strengthening relationships across federal agencies and with relevant authorities around the world; in streamlining our investigative and enforcement efforts across multiple offices and agencies; and in implementing cutting-edge strategies for recovering – and more effectively utilizing – precious taxpayer resources.
Thanks to the Task Force’s extraordinary efforts, our approach in identifying and combating financial fraud has never been smarter, more systematic, or more effective. In recent years, this has enabled us to execute the largest financial and health-care fraud takedowns on record; to carry out the biggest bank fraud prosecution in a generation; and to secure charges – and record sentences of more than 100 years – in a range of cases against CEOs, CFOs, corporate owners, board members, presidents, general counsels, and other executives of Wall Street firms, hedge funds, and banks that engaged in fraudulent activities.
These results – and the actions we announce today – stand as a testament to the hard work of investigators, prosecutors, law enforcement officials, and analysts from the Department’s Criminal and Antitrust Divisions, the FBI, and a variety of partner agencies and organizations. I’d particularly like to thank our allies and counterparts from the CFTC’s Division of Enforcement – which referred this matter to the Department – as well as the Securities and Exchange Commission, the U.K. Financial Services Authority, the Swiss Financial Market Supervisory Authority, the Japan Financial Services Authority, and the Japanese Ministry of Justice – all of whom made invaluable contributions to our investigation.
Finally, I’d like to acknowledge the tremendous work of each of the Task Force members, Justice Department leaders, local officials, and critical agency partners who have made today’s announcement possible. And I’d like to turn things over to another key leader – Assistant Attorney General Lanny Breuer – who will provide additional details about today’s actions.