The U.S. Justice Department is set to rip up its agreement not to prosecute UBS Group AG (UBS) for rigging benchmark interest rates, according to a person familiar with the matter, taking a new step to hold banks accountable for repeat offenses.
The move by the U.S. would be a first for the industry, making good on a March threat by a senior Justice Department official to revoke such agreements and putting banks on notice that these accords can be unwound if misconduct continues.
UBS is among the five banks that are poised to reach settlements with U.S. regulators over allegations that they manipulated currency markets, people familiar with the situation have said. Four of them — Citigroup Inc. (C), JPMorgan Chase & Co. (JPM), Barclays Plc and Royal Bank of Scotland Group Plc — will likely enter pleas related to antitrust violations, people familiar with the talks have said.
UBS’s cooperation in the currency probe may help shield it from antitrust charges in that matter. However, the bank is still exposed to fraud charges in that case, and any admission of wrongdoing could also put it in violation of an earlier deal the Zurich-based bank struck with the Justice Department
UBS shares fell as much as 2.1 percent and were 0.9 percent lower as of 11:13 a.m. in Zurich trading on Tuesday, paring gains this year to 14 percent.