UBS Immunity, State Street, Offshore Hearing: Compliance

UBS AG, trying to reprise its success in limiting fines in a probe of interest-rate rigging, is seeking immunity in the U.S. and European Union as part of the global investigation of currency markets, two people with knowledge of the case said.

UBS saved itself billions of euros in fines in December by disclosing to the EU its role in manipulating the London Interbank offered rate. Now, the bank aims to be the first to report its own conduct in currency markets to European and American regulators, said the people, who requested anonymity because the matter isn’t public.

The Zurich-based bank is making its bid for leniency as at least a dozen regulators probe allegations that traders colluded to rig benchmarks in the $5.3 trillion-a-day currency market. The world’s biggest banks are under scrutiny, and at least 21 people have been fired or suspended as a result.

UBS said in a filing last year that it began a review of its currency operations in June after media reports, first by Bloomberg News, on potential manipulation of the WM/Reuters rates used by companies and investors around the world.

Gregg Rosenberg, a spokesman for UBS, declined to comment on any contacts with regulators involving the probes. The firm said in a regulatory filing it’s cooperating with all investigations connected to currency trading.

Antoine Colombani, a spokesman for the EU in Brussels, declined to comment on whether UBS would be offered immunity in the foreign exchange probe.

Compliance Action

Massachusetts Opens Inquiry Into 401(k) Contribution Delays

The Massachusetts Securities Division is calling on 401(k) plan administrators to report how many companies have shifted to a lump-sum matching contribution once a year, a change that can undermine worker savings.

The unit sent a letter to the 25 largest providers of 401(k) plans, requesting the number of employers who pay distributions at year-end, when the move was made from more frequent payroll periods and what workers are told about the potential consequences, the division said in a statement yesterday.

Companies across industries are squeezing 401(k) contributions by holding back on the amount and timing of their matching funds, making it harder for U.S. workers to save for retirement, Bloomberg News reported on Feb. 14.

Companies save money by making lump-sum payments into 401(k) accounts at the end of the year or after, according to the Massachusetts statement. Employees miss out on gains on matching contributions that could accrue during the year and employer contributions may go into a declining market. Workers may also lose out if they leave the company before Dec. 31.

The Securities Division requested that 401(k) providers submit the requested information by March 10, according to the statement.

State Street Says SEC, U.S. Attorney Probe U.K. Allegations

State Street Corp., the third-biggest custody bank, said the U.S. Securities and Exchange Commission and U.S. Attorney’s offices are conducting separate investigations into claims that it overcharged clients in the U.K.

State Street paid a fine of $37.8 million to settle allegations made in January by the U.K. Financial Conduct Authority that it charged clients in excess of contractual terms, the Boston-based firm said Feb. 21 in a regulatory filing.

State Street deliberately overcharged six clients a total of $20.2 million from June 2010 until September 2011, the FCA said last month.

The firm “dismissed individuals centrally involved in the overcharging” in 2011, State Street said in a Jan. 31 statement posted on its website. The firm also enhanced controls to address the “unacceptable situation,” State Street said.


Credit Suisse’s Dougan, Cerutti, to Testify on Capitol Hill

The U.S. Senate Permanent Subcommittee on Investigations named Credit Suisse Group AG executives who will testify during a hearing tomorrow on offshore accounts.

The witnesses include Chief Executive Officer Brady Dougan and General Counsel Romeo Cerutti, according to a statement.

Credit Suisse admitted to U.S. Securities and Exchange Commission violations on Feb. 21 and agreed to pay $197 million in fines.

For a list of witnesses planned for the hearing, click here.

Levitt Says High-Speed News Transmission Violates FD

Arthur Levitt, a former U.S. Securities and Exchange Commission chairman and an adviser to Goldman Sachs Group Inc., said the spirit of fair disclosure is violated by transmission of news through high-speed lines that aren’t available to all investors.

Levitt talked with Bloomberg’s Tom Keene and Michael McKee on Bloomberg Radio’s “Bloomberg Surveillance.”

To listen, click here.

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