- Financial Conduct Authority proposes to ban Arif Hussein
- Hussein is planning to fight the FCA's decision in court
The U.K. markets regulator is seeking to ban a former UBS Group AG trader in relation to the manipulation of Libor, the second banker the agency has targeted over the benchmark this week.
Arif Hussein, 36, the former head of UBS’s sterling rates desk, tried to influence interest-rate benchmark submissions 21 times between January and March 2009 to benefit his trading positions, the Financial Conduct Authority said Thursday in an e-mailed statement. Hussein is fighting the punishment and has referred the FCA’s decision to a London court, the regulator said.
After handing out hundreds of millions of pounds in fines -- including a 160 million-pound ($227 million) penalty for UBS -- in the scandal over the manipulation of the London interbank offered rate, the FCA is turning its attention to individuals. On Tuesday, former Royal Bank of Scotland Group Plc trader Paul White was banned by the regulator for allowing his submissions to be influenced by the interests of RBS traders.
Hussein "closed his mind" to the risk that co-workers at UBS who submitted rate data would use his preferences to influence Libor and as a result "acted recklessly," the FCA said.
Hussein called the accusations absurd, countering that he had no idea the trader he had been talking to was a Libor submitter, that he was compelled by a senior manager to share details of his positions, and that when he raised concerns with his boss about the communications he was told to carry on.
"I worked as a very junior trader for UBS at a time when UBS admitted it routinely sought to manipulate Libor," Hussein said in an e-mailed statement. "I am accused of lacking integrity by recklessness because I provided information relating to my trading positions to a person I later found out was the reserve Libor submitter. This was a person I had never met who was located in another country."
If the FCA is successful in court, Hussein would be the fifth person banned from working in the industry over Libor manipulation.
Global fines related to Libor, a benchmark interest rate used in trillions of dollars of derivatives and loans, have reached about $9 billion and more than 20 traders have been charged.
Last year, former UBS banker Tom Hayes was convicted of rigging the rate. But in January, six ex-brokers who worked with Hayes were cleared by a London jury.