UBS Libor Conspiracy — Foreign Subsidiary Pleads Guilty — Why Not the Parent Corp. Also?


A Japanese subsidiary of the Swiss bank UBS plead guilty for conspiring to fix LIBOR rates. The concern among many is why the Justice Dept. did not also insist on a similar plea by its parent Swiss corporation. “UBS Admits Rigging Tares in ‘Epic’ Plot.” Wall Street Journal (December 20, 2012). To me the scale of UBS’s involvement in rate fixing is beyond astonishment, well beyond that of Barclays. The conspiracy to fix LIBOR is a question of global collusion at its worst. Until the U.S. Dept.  of Justice decides to prosecute this type of activity and to hold parent companies criminally responsible, I simply don’t see what the incentive is for global banks to curtail this illegal behavior. Finding a parent company criminally responsible holds the downside risk for these banks of being barred from the U.S. marketplace. This would be the death knell for such banks. This is the proper national policy to enforce responsible global behavior of global financial institutions. Today’s globalized economy demands nothing less.

About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (Schar School of Public Policy).
This entry was posted in Global Trade Relations and tagged , , , , . Bookmark the permalink.

1 Response to UBS Libor Conspiracy — Foreign Subsidiary Pleads Guilty — Why Not the Parent Corp. Also?

  1. I am surprised that this issue with LIBOR is not a bigger one. Most people have no idea what transpired. No doubt, there should be steps taken to ensure that this does not happen again.

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