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Six former UBS employees banned by Swiss in currency probe
[BERLIN] Switzerland's financial regulator banned six former UBS Group AG employees from working in the industry for as long as five years, making them the first individuals punished in the global currency-rigging scandal.
The former managers and traders were "directly responsible for serious breaches of regulation at UBS in this business," Finma said in a statement Thursday, without disclosing any names.
Proceedings against four other UBS currency traders were dropped in August after they were given "reprimands," and one other case is continuing, the regulator said.
"Those responsible for the management of foreign exchange trading tolerated, and at times encouraged, behavior which was improper and against the interests of clients," the Swiss regulator said.
"Although managers were aware that traders were able to use chat groups to share information and knew of the risks associated with this behavior, they failed to implement adequate systems and controls and to consistently monitor compliance."
While more than 30 traders have been fired, suspended or put on leave, before today, no individuals had been punished by authorities in relation to the foreign-exchange manipulation scandal, which has seen seven banks fined about US$10 billion by global authorities. UK prosecutors are conducting a criminal probe into the scandal.
Mark Hengel, a spokesman for UBS, declined to comment on the announcement.
The UBS traders are among 11 ex-employees Finma said it was investigating in November 2014, when it ordered UBS to give up 134 million Swiss francs (S$190.1 million) in profits, after it "severely violated" proper conduct in currency markets.
UBS's former head of global foreign exchange trading has been suspended from senior management positions in the Swiss finance industry for four years, and the Zurich-based bank's former global foreign exchange spot trading chief for five years, Finma said Thursday.
Finma focused its investigation on allegations the individuals had abused clients through practices such as front- running, excessive markups and deliberately triggering stop-loss orders, according to a Finma letter sent to the traders seen by Bloomberg.
Traders spoke openly in chat rooms of their attempts to manipulate currency benchmarks such as the 4 pm WM/Reuters fix, according to global settlements with regulators.