Rate Scandal Sees U.K. Fines Triple Previous Record in 2012

Penalties against Barclays Plc and UBS AG for their roles in the Libor rate-rigging scandal helped the U.K. Financial Services Authority more than triple its previous fines record in 2010 to at least 312 million pounds ($506 million) this year.

The FSA’s penalties would have been even higher, at more than 400 million pounds, without discounts granted in about two- thirds of cases for cooperation with the regulator, London-based law firm Reynolds Porter Chamberlain LLP said in an e-mailed statement.

The FSA fined Barclays, the U.K.’s second-biggest bank, around 60 million pounds and UBS 160 million pounds this year for attempting to manipulate the London benchmark interbank interest rate, known as Libor.

“The two huge fines for rate-rigging will be followed by several others next year, which means we could see another record year of fines for financial services businesses,” Richard Burger, a partner at RPC, said the statement.

Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier.

UBS was also fined 29.7 million pounds last month by the FSA and told by Swiss supervisors that it may have to increase capital levels for operational risks after a $2.3 billion loss from unauthorized trading by Kweku Adoboli.

The former trader in UBS’s London office was sentenced to seven years in jail on Nov. 20 for fraud in relation to the loss, the largest from unauthorized trading in British history.

To contact the reporter on this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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