Ex-UBS Trader, Whose Case Judges Called a ‘Tragedy,’ Sues Bank

(Bloomberg) -- A former UBS Group AG trader, banned from the finance industry over allegations he manipulated Libor rates, is suing the bank for breach of contract.

Arif Hussein, a former head of UBS’s sterling rates desk, filed a lawsuit in London this week, according to court records. Judges at a specialist tribunal had ruled last year that Hussein didn’t personally manipulate the benchmark interest rate and acted with “integrity,” even as they upheld the regulator’s decision to prevent him from working in finance.

Court records indicated that the claim related to breach of contract, but no further details were provided. A lawyer for Hussein at Kyriakides and Braier didn’t return a call seeking comment.

A UBS spokeswoman declined to comment.

In their ruling last year, a panel of judges said the decision to ban Hussein was a "tragedy" for him and he shouldn’t face a lifetime ban. The panel found a number of "troubling" issues with the way the Financial Conduct Authority investigated UBS’s conduct. The judges said the FCA investigated a junior trader while the bank’s officials didn’t garner much attention.

“This was against a background of widespread manipulation of Libor within UBS for which senior managers bear ultimate responsibility and which” was widely condoned, the tribunal said.

The FCA has handed out hundreds of millions of pounds in fines -- including a 160 million-pound ($210 million) penalty for UBS -- over the manipulation of the London interbank offered rate, a key benchmark tied to the value of many financial products.

The court, however, said that “there was no doubt that” Hussein “did mislead” the FCA during interviews.

“We characterize what happened as Mr. Hussein being economical with the truth rather than deliberately giving false answers,” Judge Timothy Herrington said in the ruling. “His sin was one of omission.”

©2019 Bloomberg L.P.