The global-wide probe into the foreign exchange markets has caused institutions, which are under regulator microscopes, to send their traders packing. Over the last six months, nearly two dozen traders, as high as chief dealers, have been fired or put on leave from institutions, such as Citigroup and Barclays PLC.
However, UBS has gone out of its way to set an example and put seven traders on leave — six this week! The latest was 20-year UBS veteran trader Michael Velardi, who worked on the firm’s New York FX trading desk. UBS opened their own internal investigation on the activity of their traders after a Bloomberg News story broke about trader manipulation over the WM/Reuters rates last June.
Other traders UBS suspended this week were Onur Sert, an emerging market spot trader based in New York, and several others worldwide. UBS has been the largest bank to open its own investigation since the probes started. Niall O’Riordan, UBS co-chief dealer, was suspended last year after the manipulation news broke.
UBS is the world’s fourth largest forex market participant, seeing over 10 percent of the action, according to the latest Euromoney Poll. The banking giant also acknowledged, in their fourth-quarter earnings results, that it has set aside $1.9 billion for impending litigation.