2023-06-20 08:45:55 ET
With the acquisition of rival Credit Suisse, UBS Group ( NYSE: UBS ) could face hundreds of millions of dollars in fines over CS's involvement with Archegos Capital, the Bill Hwang family office that collapsed in 2021 , according media reports.
The U.S. Federal Reserve may fine Credit Suisse as much as $300M over the Archegos issue, and the U.K. Prudential Regulation Authority's fine could be as high as £100M ($128M), the Financial Times reported on Monday, citing people with knowledge of the investigations.
The bank had asked Swiss financial regulator Finma, the U.S.'s Fed, and U.K.'s Prudential Regulation Authority to publish their findings and announce any penalties at the end of July. The timing, though, could slip because of UBS's ( UBS ) acquisition of Credit Suisse.
Finma doesn't have the authority to impose penalties on financial institutions, but it does plan to issue a report on Credit Suisse's shortcomings regarding Archegos, the FT said . Credit Suisse suffered the biggest loss , eventually totaling $5.5B, of any bank that dealt with Archegos as it allegedly ignored warning signs and was slow to unwind positions related to the account.
UBS ( UBS ) has set up $4B of provisions to cover regulatory and litigation costs from the government-brokered deal.
More on UBS's acqusition of Credit Suisse:
- UBS closes Credit Suisse takeover, reportedly set strict curbs for staff
- UBS Acquisition of Credit Suisse: More Problems Ahead
- UBS, Swiss government sign loss protection pact for Credit Suisse acquisition
- UBS gives takeover financials from rushed Credit Suisse rescue
- Credit Suisse and UBS Merger: Not Without Consequences
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UBS could face hundreds of million dollars' worth of fines from Archegos - report