UBS To Pay About $400 Mln Fine For Misconduct By Credit Suisse In Archegos Dealing

(RTTNews) - Swiss banking major UBS Group AG (UBS) will pay about $400 million in fines to U.S., Swiss and U.K. banking authorities for misconduct by Credit Suisse, which UBS acquired in June 2023. The misconduct involved Credit Suisse's unsafe and unsound counterparty credit risk management practices with its former counterparty, Archegos Capital Management LP.

The U.S. Federal Reserve Board announced a $268.5 million fine with UBS for misconduct by Credit Suisse.

In 2021, Credit Suisse suffered about $5.5 billion in losses because of the default of Archegos, an investment fund. During Credit Suisse's relationship with Archegos, Credit Suisse failed to adequately manage the risk posed by Archegos despite repeated warnings, the Federal Reserve Board said in a statement.

Meanwhile, the U.K.'s Prudential Regulation Authority or PRA said it fined Credit Suisse 87 million pounds for significant failures in risk management and governance between 1 January 2020 and 31 March 2021, in connection with Credit Suisse's exposures to Archegos Capital Management.

The Prudential Regulation Authority action was part of a co-ordinated global resolution, incorporating action by the Swiss Financial Market Supervisory Authority and the Federal Reserve Board, which provides for combined penalties in excess of $387.5 million being imposed by the PRA and Federal Reserve Board.