Tuesday, March 26, 2013

UBS Asks Singapore Court to Seal Cases of Two Fired Traders

Story originally appeared on the New York Times.

SINGAPORE (Reuters) - UBS AG has filed an application to the Singapore High Court asking that two cases be sealed involving traders fired as part of the bank's investigation into reference rate manipulation.

The request for seals underscores the highly sensitive information within the cases, which stem from a global crackdown on banks involved with submitting false reference rates for various markets to benefit trading books.

Mukesh Chhaganlal and Prashant Mirpuri are suing the Swiss bank in separate cases for wrongful dismissal, saying they were sacked in order to lessen UBS's role in the alleged manipulation of currency reference rates in Singapore.

In affidavits filed on March 22, UBS lawyer Sannie Sng said the traders were terminated as a "result of serious misconduct" and that it intends to defend itself against the lawsuit. The traders have said UBS never provided them with reasons for their dismissal.

The bank asked that the cases be sealed from public view, arguing that premature disclosure of the bank's investigation into the fired traders would hamper its ongoing probe into the matter, as well as the review carried out globally by regulators looking into the manipulation of rate fixings.

"I ... verily believe that a sealing order would protect the integrity of the various investigations by regulators," Sng said in the affidavit.

Daniel Chia, a director at Stamford Law who is acting for both the traders, declined to comment on the application.

The Monetary Authority of Singapore (MAS) ordered banks that help to set local interbank lending rates and currency reference rates to review the fixing process last year as U.S. and British regulators cracked down on manipulation of Libor, a benchmark used to set interest rates for around $600 trillion worth of securities.

UBS said Chhanganlal and Mirpuri were fired as a result of those reviews.

It added that information involved in the case is likely to be of interest not just to the MAS's investigation but also to other reviews into rate manipulation taking place in other countries.

UBS was fined $1.5 billion in December last year for its role in a multi-year scheme to manipulate the London interbank offered rate (Libor) and other benchmark interest rates.

The two traders filed suits at the end of February, seeking damages including salary in lieu of notice and shares they said would have been due to them under the bank's equity ownership program had they not been fired.

UBS's application follows a similar move by Royal Bank of Scotland, which successfully applied last year for a case in Singapore to be sealed. RBS was defending itself against a wrongful dismissal suit from a former trader, Tan Chi Min, who the British lender says was fired for trying to improperly influence the bank's reference rate setters.

Tan sued the bank in December 2011, saying the practice of making requests to the bank's rate setters was known by RBS management, but the status of the case is now unclear as it has been sealed since September of last year.

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