UBS is facing fines in the hundreds of millions of dollars stemming from Credit Suisse's Archegos debacle. US, UK, and Swiss regulators have completed their investigations.
When Archegos blew up in March 2021, it was the largest trading loss Credit Suisse had in its history, losing some $5.5 billion. It's UBS's problem now.
With Switzerland's Finma, the UK's Prudential Regulation Authority (PRA), and the Federal Reserve having completed their investigations into the matter, it's time to pay the piper.
The Fed could impose a fine as high as $300 million, with the PRA as much as 100 million pounds ($128 million), according to a story in the «Financial Times» (behind paywall) citing people familiar with the matter.
Finma has not imposed a fine because it doesn't have the authority to do so, although it plans to publish a report detailing the matter.
Eating Into Provisions
The fines will eat into the $4 billion that UBS has set aside for legacy regulatory and litigation issues it inherited as part of its government-ordered takeover of Credit Suisse in March.
According to the report, settlement talks have begun, and the fines could be negotiated lower as part of an agreement to end the matter.
In March, before Credit Suisse was taken over, it had sought to settle the Archegos case. In April of last year, Archegos founder Archegos founder Bill Hwang was arrested in New York on multiple charges related to the collapse of the firm. His case is expected to go to trial in October.
