* US brokers, branch managers get talking points on Libor
* "We work for another subsidiary," executive says
* Brokers bruised by years of scandals
By Jed Horowitz and Jennifer Hoyt Cummings
NEW YORK, Dec 19 UBS AG's army of U.S.
brokers say they are being asked to apologize once again for the
sins of their big European parent.
Following the Swiss bank's admission on Wednesday morning
that it would pay $1.5 billion for fraud, bribery and rigging
the London Interbank Offered Rate, the firm's 7,000 U.S. brokers
and branch managers received an e-mail from their boss with a
message for clients and potential recruits.
"Many of you have asked me what I will say to clients,
prospects, recruits, family and friends who ask about the Libor
settlement and its impact on me and WMA," wrote Bob Mulholland,
head of wealth management and investment solutions at UBS Wealth
Management Americas. "Here are the main points I will use in
He followed with six bullet points that progressed from a
quick apology -- "The behavior of some of our employees is
unacceptable" -- to five ways U.S. colleagues can distance
themselves from a crisis that includes criminal charges lodged
by the U.S. government against senior UBS traders.
"We work for another UBS subsidiary....had no
involvement in this misconduct," Mulholland wrote.
The headline-making settlements with global regulators will
have "little or no impact on U.S. Management Americas'
business," he continued. Even after paying the billion-dollar
fine, UBS AG remains one of the world's "best-capitalized"
The brokerage executive also noted that the bank has
overhauled its top management team and compliance procedures.
A UBS spokeswoman confirmed the contents of the e-mail and
declined further comment.
UBS ambled into the U.S. brokerage business in 2000 when it
bought PaineWebber. But its adviser force has been dealing with
negative news relating to its parent since the financial crisis
of 2008. The bank lost more than $50 billion in a U.S. hedge
fund business. It also suffered after it sold auction-rate
securities to retail investors that became illiquid. In 2009 and
2010, the firm settled charges of helping wealthy Americans
A $2 billion rogue trading scandal discovered last year led
to the overturn of the bank's top management. The firm abandoned
its once-powerful bond trading business globally to focus on
wealth management. Several brokers said that 2012 was the first
year in many in which they felt some relief from headline
One adviser on Wednesday morning said two or three clients
had already discussed the Libor issue with him, while another
said none of his clients raised the subject.
The Libor rate, based on what banks charge each other for
loans, is a benchmark used to price everything from corporate
loans to the mortgages that some UBS brokers sell. One broker,
without advice from Mulholland, said he told clients that in
most cases UBS traders underpriced Libor so they would not have
been hurt by rates they were charged.
In imposing the $1.5 billion penalty, Switzerland's bank
regulator said UBS traders underpriced and overpriced their real
Libor costs to both disguise the precariousness of the bank's
financial condition and to enhance proprietary trading
"I remain extremely proud to work for UBS Wealth Management
Americas," Mulholland wrote at the end of his e-mail. "I hope
this helps. Please call if you need me."