UBS plans to admit that 36 traders around the world manipulated yen Libor between 2005 and 2010 and is facing a $1.63 billion fine for its participation in the global rate-rigging scandal.
Individuals familiar with the matter said that the bank hoped its cooperation with regulators would result in a softer enforcement action, adding that UBS was surprised by the size of the anticipated settlement, Reuters reports.
If the settlement goes through, it would be the largest ever paid out by the bank. UBS was fined $48.36 million last month for the participation of Kweku Adoboli, one of its London-based traders, in the rate-rigging.
Additionally, a settlement would make UBS the second major bank to be fined for its role in the scandal. Barclays paid out more than $450 million to British and U.S. regulators in June for its participation in the Libor scandal, according to Reuters.
The fine, in addition to plans to cut staff and restructure, would most likely result in losses for the fourth quarter.
By admitting to charges of rate manipulation by its Japanese subsidiary, UBS could avoid prosecution against its whole operation, which could kill the institution, Reuters reports.
Mark Branson, the former CEO of UBS Japan who is now responsible for big bank supervision at Swiss financial regulatory agency Financial Market Supervisory Authority, recently set out on a public affairs tour regarding the Libor investigation. Branson has removed himself from the investigation in order to avoid the appearance of conflict of interest.