UBS Fossil Spills the Beans

Fossil (Picture: Shutterstock)

Fossil (Picture: Shutterstock)

A former UBS trader involved in the exchange-trade manipulation under investigation in the U.S. has changed sides and is helping the justice authorities to track down former colleagues.

Matt Gardiner, code-named «Fossil», was one of the traders active in the «Cartel» chatroom, an instant-messaging group the U.S. justice authorities believe was used to manipulate the foreign-exchange trade.

The former banker at UBS is now helping the authorities with their investigations, «Bloomberg» reported, suggesting that the U.S. government will use his knowledge to get at other individuals who participated in the manipulations.

Massive Leverage

Gardiner earned his nickname thanks to his age relative to the other participants in the «Cartel». He and his colleagues at five global banks, UBS, J.P. Morgan, Citigroup, Barclays and Royal Bank of Scotland had used the «Cartel» to discuss their manipulations from 2007 through 2013.

The four banks with senior traders in the «Cartel» – J.P. Morgan, UBS, Citigroup and Barclays – controlled about 45 percent of the global spot-currency market, «Bloomberg» said in its report, giving the traders involved a massive leverage.

The news organization also said that the investigators are «confident» to be able to charge individuals over currency-rate manipulation, possibly as soon as this summer. The five banks mentioned in the story declined to comment, according to «Bloomberg».

Swiss Investigations

Whether Gardiner will be treated more leniently because of his willingness to cooperate with the investigators is unknown. UBS has been awarded immunity from antitrust charges because it reported its involvement as the first implied institution.

Switzerland's biggest bank and four other institutes involved in the scandal in 2014 paid $3 billion to U.S. and U.K. authorities. UBS also paid 134 million francs to Finma, the Swiss financial market regulator, which also investigated the traders. The Swiss Competition Commission is also investigating the matter.

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