Swiss Bank UBS Gets Slapped With $1.5B Fine In Libor Scam

The manipulation of Libor, which is the abbreviation for the London Interbank Offered Rate, hurt other banks that were playing by the rules, and investors who should have seen higher yields on certain securities but were denied those gains, including pension funds holding teachers' retirements.

An announcement could come as early as Monday, and the fine was expected to top $1 billion, according to DealBook, which cited anonymous sources close to the case. If the penalty turns out to be that high, it would be more than twice the $450 billion Britain’s Barclays PLC (NYSE: BCS) agreed to pay in June.

The Libor rate, which is calculated daily, is a benchmark that affects the cost of consumer debt, like student loan rates and credit card interest rates. 

The UBS fine likely won't be the last one. Deutsche Bank AG (NYSE: DB) and Royal Bank of Scotland Group PLC (NYSE: RBS) have both indicated they expect to pay penalties in the near future.

On Tuesday, three executives were arrested in connection to the rate manipulation. Two unnamed brokers and Thomas Hayes, a former UBS and Citigroup Inc. (NYSE:C) trader, later posted bail.