UBS to pay $1.5B in fines for rate manipulation

Updated 4:30 a.m.

GENEVA Switzerland's UBS AG agreed Wednesday to pay some $1.5 billion in fines to international regulators following a probe into the rigging of a key global interest rate.

In admitting to fraud, Switzerland's largest bank became the second bank, after Britain's Barclays PLC, to settle over the rate-rigging scandal. The fine, which will be paid to authorities in the U.S., Britain and Switzerland, also comes just over a week after HSBC PLC agreed to pay nearly $2 billion for alleged money laundering.

The settlement caps a tough year for UBS and the reputation of the global banking industry. As well as being ensnared in the industry-wide investigation into alleged manipulations of the benchmark LIBOR interest rate, short for London interbank offered rate, UBS has seen its reputation suffer in a London trial into a multibillion dollar trading scandal and ongoing tax evasion probes.

As a result of the fines, litigation, unwinding of real estate investments, restructuring and other costs, UBS said it expects to post a fourth quarter net loss of between $2.2-2.7 billion.

Nevertheless, the Zurich-based bank maintained that it "remains one of the best capitalized banks in the world."

Other banks are expected to be fined for their involvement in the LIBOR scandal. LIBOR, which is a self-policing system and relies on information that global banks submit to a British banking authority, is important because it is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.

UBS characterized the probes as "industry-wide investigations into the setting of certain benchmark rates across a range of currencies."

The UBS penalty is more than triple the $450 million in fines imposed by American and British regulators in June on Barclays for submitting false information between 2005 and 2009 to manipulate the LIBOR rates. Those fines exposed a scandal that led to the departure of Chief Executive Bob Diamond and the announcement that Chairman Marcus Agius would step down at the end of the year.

In accepting the fines, UBS said some of its employees tried to rig the LIBOR rate in several currencies, but that its Japan unit, where much of the manipulation took place, entered a plea to one count of wire fraud in an agreement with the U.S. Justice Department.

UBS said some of its personnel had "engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions" and that some employees had "colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions."

UBS added that "inappropriate directions" had been submitted that were "in part motivated by a desire to avoid unfair and negative market and media perceptions during the financial crisis."

Britain's financial regulator called the misconduct by UBS "extensive and broad" with the rate-fixing carried out from UBS offices in London and Zurich.

Different desks were responsible for different rate submissions. At least 2,000 requests for inappropriate submissions were documented -- an unquantifiable number of oral requests, which by their nature would not be documented, were also made, the U.K.'s Financial Services Authority said.

"Manipulation was also discussed in internal open chat forums and group emails, and was widely known," the FSA said. "At least 45 individuals including traders, managers and senior managers were involved in, or aware of, the practice of attempting to influence submissions."

Sergio Ermotti, who was appointed CEO of UBS AG in November 2012 in the wake of a major trading scandal, said the misconduct does not reflect the bank's values or standards.

"We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of the firm, and we are committed to doing business with integrity," he said.

With more than $2.4 trillion in invested assets, UBS is one of the world's largest managers of private wealth assets. At last count, the bank had 63,745 employees in 57 countries. It has said it aims for a headcount of 54,000 in 2015.

Along with Credit Suisse, the second-largest Swiss bank, UBS is on the list of the 29 "global systemically important banks" that the Basel, Switzerland-based Bank for International Settlements, the central bank for central banks, considers too big to fail.

It's not the first time that UBS has fallen afoul of regulators. Notably, in 2009, U.S. authorities fined UBS $780 million in 2009 for helping U.S. citizens avoid paying taxes.

The U.S. government has since been pushing Switzerland to loosen its rules on banking secrecy and has been trying to shed its image as a tax haven, signing deals with the United States, Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens' accounts.

In April, Ermotti called Switzerland's tax disputes with the United States and some European nations "an economic war" putting thousands of jobs at risk.

And in September 2011, the bank announced more than $2 billion in losses and blamed a 32-year-old rogue trader, Kweku Adoboli, at its London office for Britain's biggest-ever fraud at a bank.

Britain's financial regulator fined UBS, saying its internal controls were inadequate to prevent Adoboli, a relatively inexperienced trader, from making vast and risky bets. Adoboli has been sentenced to seven years in prison.

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Guns in Circulation Is Biggest Obstacle, Expert Says

Editor's Note: This post is part of a larger series by ABC News examining the complex legal, political and social issues in the gun control debate. The series is part of ABC's special coverage of the search for solutions in the wake of the tragedy at Sandy Hook Elementary School in Connecticut.

The Second Amendment of the Constitution reads: "A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed."

Despite that seemingly clear statement that Americans have the right to buy and own guns, legal experts say it does not preclude the government from enacting measures to regulate the manufacturing and distributing of firearms.

"The biggest misconception is the idea that the Second Amendment imposes serious hurdles to gun control," says Adam Winkler, law professor at UCLA and author of "Gun Fight: The Battle Over the Right to Bear Arms in America."

"The Supreme Court has made it crystal clear that there is plenty of room for effective gun control laws," he said. "The right of people to have guns and gun control are not mutually exclusive."

Legislation introduced which proports to control gun violence has historically focused on regulating high-capacity ammunition clips and certain types of semi-automatic firearms. Polling shows that these types of regulations are generally popular, and therefore proposals to ban the sale of these types of weapons and weapon accessories makes political sense.

Charles Dharapak/AP Photo

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But legislation to control sales of weapons don't address the biggest hurdle to effective gun control -- the guns that are already in circulation.

"The biggest problem for gun control today is a number: 300 million," Winkler said. "That's roughly the number of guns there are in civilian hands today. Any new law you pass confronts the reality of 300 million guns already in circulation."

Federal and state government hands are tied when it comes to regulating these already circulated firearms, he said.

"You can outlaw assault rifles for instance, say that anyone who has one, it's illegal, you have to turn it in," Winkler said. "You could do that, but they won't be turned in. It's not that you can't outlaw them, it's just that practically speaking you can't get rid of them."

Additionally, the politically popular avenue of banning the manufacturing and sale of certain types of semi-automatic weapons is inherently flawed.

For a gun to be classified as a semi-automatic, it must be designed to automatically reload a bullet after the shooter pulls the trigger. Virtually every civilian-owned gun is a type of semi-automatic gun, which means banning all semi-automatic guns would likely be read by the courts as a violation of the Second Amendment, and therefore any ban on these weapons would be limited in scope.

Automatic firearms -- those in which a shooter pulls the trigger once and the gun fires multiple rounds of bullets -- are tightly regulated and have been since the 1930s.

While regulation of certain types of semi-automatics, such as assault weapons, has broad public support, broader legislative actions are not. A recent ABC News/Washington Post poll conducted in the aftermath of the mass shooting in Newtown, Conn., found that 71 percent of Americans oppose banning the sale of handguns to everyone except law enforcement officials.

"The court's reading of the Second Amendment is completely in sync with the American public's views on firearms," said Randy Barnett, professor of constitutional law at Georgetown University. "That is, you're allowed to have firearms, you're allowed to have them in the home for self-defense. ... Americans are willing to consider reasonable regulations of that, and courts are also willing to consider that."

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'Pinch-and-paste' app boosts your interior design skills

Paul Marks, senior technology correspondent

(Image: Tulcarion/Getty)

Ever idly wondered what your kitten would look like if it had
your hairstyle? Or what your living room would look like
with a tiger-print shag-pile carpet? An augmented reality app will one day let you visualise such things on tablets or phones in an interesting way: you'll simply "pinch" the texture you want from an image on a
touchscreen and paste it onto a photo of the target.

It's the work of Kiyoshi Kiyokawa at Osaka University in Japan and colleagues, who demonstrated their system - called "pinch-n-paste" - at the Virtual Reality Software and Technology (VRST 2012) conference in Toronto, Canada, last week. Their work-in-progress system computes how the 3D texture pixels (or "texels") should wrap around the shape of the target 3D surface and then maps them onto it.

"In the case of interior design, a user could grab a texture from a real
chair in a room and paste it to an image of a sofa to see how the
newly covered sofa suits the room," Kiyokawa says.

Pinch-n-Paste in action (Image: Kiyoshi Kiyokawa, Osaka University)

"We aim to be able to change any real object's appearance by sampling another real or virtual object's colour, texture, shape and so on, and move, delete, duplicate them as if they are virtual," he says. Combined with a head-mounted display - like Google Glasses - it will feel like "your own tailored world is real".

But what about my pasting my bouffant onto my cat? "Technically it's much more challenging, as cats are difficult to track. But it is along our research direction," Kiyoshi says.

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S. Korea's Park to win presidential vote: TV

 

SEOUL: South Korea has elected its first woman president, TV channels said Wednesday, predicting a clear victory for conservative Park Geun-Hye, daughter of the country's former dictator.

The KBS, SBS and MBC national broadcasters all declared Park "certain" to secure victory over her liberal rival Moon Jae-In with nearly 40 per cent of the nationwide vote counted.

- AFP/ck

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Libya siege: Ambassador's last minutes

STORY HIGHLIGHTS

• U.S. Ambassador Chris Stevens was killed in September of this year


• He was the first U.S. ambassador murdered since 1988


• Along with Stevens, three other Americans were killed

(CNN) -- They were hiding in a place security officers called a "safe area." It was anything but.

Outside an angry crowd grew, gunfire rang out and a fire blazed.

Thick smoke blinded the three trapped men. The intruders banged on the fortified safety gate of the bunker-like villa.

A security officer handed his cell phone to Ambassador Chris Stevens. Prepare for the mob to blast open the locks of the safety gate, the officer said.

Attack on the U.S. Consulate in Libya

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It was a little before 10 at night on September 11, 2012. And time was running out for Stevens.

Vivid new details of the attack on the U.S. Consulate in Benghazi, Libya, were released Tuesday night by a federal committee trying to come to grips with the violence that led to the first murder of a U.S. ambassador since 1988 and the deaths of three other Americans.

The report spoke of grossly inadequate security, an issue that Stevens had complained about well before September 11.

Inquiry cites 'failures' at State Department

The brief phone call

Instead of blasting their way into the villa, the crowd retreated for some reason. But the fire still blazed.

Stevens used the cell phone to try to alert others about the attack.

Struggling to see, choked by smoke, he dialed.

He may have wanted to tell embassy officials in Tripoli that he and the small security detail at that 13-acre compound were in big trouble.

They were outmanned, outgunned. The militants had doused a large area with diesel fuel and started a hideous fire.

He may have wanted to say that he was trapped in a building they called Villa C with a security officer, and Foreign Service Information Management Officer Sean Smith.

They had to flee to the villa after intruders stormed the walled-in consulate compound armed with machine guns and rocket-propelled grenades.

But in that 9:50 p.m. phone call, Stevens could only tell the U.S. deputy chief of the mission in Tripoli that they were under attack.

The call promptly dropped.

Warning signs

Though fierce and sudden, the attack may not have been surprising for some.

U.S. diplomats who worked in Libya, a country struggling to form a government after overthrowing longtime dictator Moammar Ghadafi, had repeatedly asked for more security.

American officials, for the most part, were well-received in Libya, where many locals were grateful for the help the United States provided in overthrowing Ghadafi.

But danger remained.

There were still many Ghadafi loyalists, there was easy access to guns and the new fledgling government was having a difficult time maintaining security.

On June 1, a car bomb exploded outside a hotel in Tripoli where Stevens was staying.

The same month, Stevens had to move with his security team from the hotel because of a "credible' threat.

On June 6, a roadside bomb exploded near the U.S. compound in Benghazi, hurting no one but blasting a large hole in a wall of the compound.

The threats continued for U.S. officials and diplomats from other countries -- but security staffing remained unchanged.

The ambassador is missing

But now, there was no time to fret about woeful security.

Black smoke was filling up the safe area.

Stevens, Smith and the security officer crawled to a bathroom, hoping to open a window.

The security officer placed towels under the bathroom door and flung open the panes.

It made things worse.

The open window pulled more smoke into the bathroom, making breathing impossible.

Despite the explosions outside, they would have to flee the safe area, the officer thought. The smoke had choked out the lights. They were in total darkness.

The officer left the bathroom, crawled through a hallway, banging on the floor and yelling that the ambassador and Smith follow him.

He slipped though another window and collapsed in an enclosed patio area.

And then he noticed it.

Stevens and Smith were not there.

The officer slipped back through the window several times, even though the intruders were still shooting at him.

The smoke and heat was unbearable. He could not find either man.

He used a ladder to climb to the roof of the villa and radioed for help.

He had been in the smoky room for so long he could hardly speak. It took some time for the officers on the other end of the line to understand what he was saying.

He did not have Smith, he said. And the ambassador is missing.

The battle at the Annex

Three other security officers had barricaded themselves in another building when the siege began.

Once the first wave of attackers seemed to retreat, the officers got out of their "defensive" positions and drove an armored car to the villa. They found their colleague on the roof, vomiting, about to pass out.

The three officers crawled through the smoke inside.

They found Smith. They dragged his body out. But they were too late.

A team, from a nearby U.S. facility called the Annex, arrived and helped search for Stevens. They could not find him.

Concerned that the large crowd of militants was about to overtake the entire compound, they decided to flee back to the Annex without Stevens.

Men in the crowd began shooting, the bullets almost piercing the armored vehicle and blowing out two of its tires.

They drove on. At least two vehicles followed them.

They made it to the Annex, preparing for another fight. It was about 11:30 at night.

Just before midnight, bullets began hitting the Annex. This started a gun battle that lasted for an hour.

Hours later, another wave of attacks hit the facility with mortars, killing security officers Tyrone Woods and Glen Doherty.

Finding Stevens

Hours passed and no one knew where Stevens was.

About 2 a.m., the U.S. Embassy in Tripoli received a phone call.

It was from the cell phone of the security officer who had given his phone to Stevens.

The man on the line spoke Arabic, telling embassy officials that Stevens had been taken to a hospital in Benghazi.

Officials could not determine what hospital Stevens was taken to.

Some wondered if the phone call was a trick from militants who wanted to lure U.S. officers to their death.

A Libyan official was sent to Benghazi Medical Center. He said Stevens was there.

Hospital staff said six civilians brought Stevens to the emergency room about 1:15 a.m.

Even though the ambassador showed no signs of life, doctors worked to revive him for 45 minutes.

It was too late.

This narrative account was pieced together from a report released Tuesday night by the Accountability Review Board, an independent panel selected by the State Department.

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Poll: Half think "cliff" deal possible by year end

By Sarah Dutton, Jennifer De Pinto, Anthony Salvanto and Fred Backus

Play Video

Boehner's "fiscal cliff" concessions come with a price

With the so called "fiscal cliff" deadline looming, only half of Americans think a deal on taxes and spending cuts will be made before the end of the year. Forty-four percent expect time will run out. Democrats (58 percent) are much more optimistic about a deal than Republicans (38 percent).

Right now all parties involved - President Obama and Democrats and Republicans in Congress -- receive negative marks for how they are handling the negotiations over taxes and spending cuts.

The public is more critical of the Republicans in Congress on this matter - 69 percent disapprove of the Republicans in Congress compared to 50 percent disapproving of the president and congressional Democrats. Meantime, 38 percent approve of how the president and Democrats are handling these negotiations compared to 17 percent approving of congressional Republicans.

Raising taxes on those with household incomes of $250,000 is supported by most Americans (69 percent to 29 percent), but they are divided on reducing government services and programs that benefit people like themselves in the name of deficit reduction; 45 percent favor that, while 48 percent oppose it.

As the current debate in Washington demonstrates, there are political differences when it comes to raising taxes and reducing government programs. 84 percent of Democrats and 66 percent of independents favor raising taxes on higher income households. Even a slim 51 percent majority of Republicans support this measure for reducing the deficit.

There are large partisan differences on cutting government spending; 58 percent of Republicans favor this, while 60 percent of Democrats oppose it.

For full poll results, see next page.

____________________________________________________________________

This poll was conducted by telephone from December 12-16, 2012 among 1,179 adults nationwide. Phone numbers were dialed from samples of both standard land-line and cell phones. The error due to sampling for results based on the entire sample could be plus or minus three percentage points. The error for subgroups may be higher. This poll release conforms to the Standards of Disclosure of the National Council on Public Polls.

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Siblings of Sandy Hook Victims Face Survivor's Guilt

Six-year-old Arielle Pozner was in a classroom at Sandy Hook school when Adam Lanza burst into the school with his rifle and handguns. Her twin brother, Noah, was in a classroom down the hall.

Noah Pozner was killed by Lanza, along with 19 other children at the school, and six adults. Arielle and other students' siblings survived.

"That's going to be incredibly difficult to cope with," said Dr. Jamie Howard, a clinical psychologist at the Child Mind Institute in New York. "It is not something we expect her to cope with today and be OK with tomorrow."

READ: Two Adult Survivors of Connecticut School Shooting Will be Key Witnesses

As the community of Newtown, Conn., begins to bury the young victims of the Sandy Hook elementary school shooting today, the equally young siblings of those killed will only be starting to comprehend what happened to their brothers and sisters.

"Children this young do experience depression in a diagnosable way, they do experience post-traumatic stress disorder. Just because they're young, they don't escape the potential for real suffering," said Rahil Briggs, a child psychologist and professor at Montefiore Medical Center in New York City.

Spencer Platt/Getty Images

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Arielle and other survivor siblings could develop anxiety or other emotional reactions to their siblings' death, including "associative logic," where they associate their own actions with their sibling's death, Howard said.

"This is when two things happen, and (children) infer that one thing caused the other. (Arielle) may be at risk for that type of magical thinking, and that could be where survivor's guilt comes in. She may think she did something, but of course she didn't," Howard said.

CLICK HERE for photos from the shooting scene.

Children in families where one sibling has died sometimes struggle as their parents are overwhelmed by grief, Howard noted. When that death is traumatic, adults and children sometimes choose not to think about the person or the event to avoid pain.

Interested in How to Help Newtown Families?

"With traumatic grief, it's really important to talk about and think about the children that died, not to avoid talking and thinking about them because that interferes with grieving process, want their lives to be celebrated," Howard said.

Children may also have difficulty understanding why their deceased brother or sister is receiving so much, or so little, attention, according Briggs.

"I think one of the most challenging questions we can be faced with as parents is how to 'appropriately' remember a child that is gone. So much that can go wrong with that," Briggs said. "You have the child who is fortunate enough to escape, who thinks 'Why me? Why did my brother go?' But if you don't remember the sibling enough the child says 'it seems like we've forgotten my brother.'"

"They may even find themselves feeling jealous of all the attention the sibling seems to be receiving," Briggs said.

Parents and other adults in the family's support system need to be on alert, watching the child's behavior, she said. Children could show signs of withdrawing, or seeming spacy or in a daze. They could also seem jumpy or have difficulty concentrating in the wake of a traumatic event.

"For kids experiencing symptoms, and interfering with ability to go to school, they may be suffering from acute stress disorder, and there are good treatments," Howard said.

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Best videos of 2012: Bonobo genius makes stone tools

Joanna Carver, reporter

A creative bonobo caught making tools slides in at number 9 in our best videos of 2012 countdown.

Kanzi just wanted a snack. Eviatar Nevo of the University of Haifa in Israel and colleagues locked some food inside a log - not to mess with the 30-year-old bonobo, but to see what he would come up with to retrieve it.

His solution? Making flints from stones then using them to drill into the log, a tactic that allowed him to successfully break into 24 different pieces of wood. Not all bonobos, however, seem to have the same knack for tool-making: Kanzi's companion got at the food twice but only by smashing the log on the ground.

Apart from crafting tools, Kanzi also paints, uses sign language and has even been seen making up words.

For more on bonobo technology, read the original article: "Bonobo genius makes stone tools like early humans did".

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ASEAN-India commemorative summit to chart future ties

SINGAPORE: The achievements in 20 years of ties between ASEAN and dialogue partner India will be celebrated with a commemorative summit in New Delhi on Thursday.

ASEAN leaders and their Indian host, Prime Minister Manmohan Singh, are expected to adopt the "ASEAN-India Vision Statement" charting the future direction of their ties at the summit.

India started its Look East policy in 1992 under the late Prime Minister Narasimha Rao. At that time, Dr Manmohan Singh was the finance minister in the Indian Cabinet.

Since then there has been no turning back on India's ties with ASEAN.

India joined the ASEAN Regional Forum in 1996 and the East Asia Summit in 2005.

At the commemorative summit, Singapore's Prime Minister Lee Hsien Loong is expected to reiterate the Republic's support for India's continued engagement of the region, its participation in the ASEAN-led forums and India's contributions to the ASEAN Community-building efforts.

Mr Gopinath Pillai, chairman of the Institute of South Asian Studies in Singapore, describes the role India can play in the region.

Mr Pillai said: "From Singapore's point of view, the involvement of all the major countries is vital and India is a major player. So we would like to see India being very involved so that all the powers have a stake here and the region will prosper.

"India's business interests will grow. As it is, Southeast Asia has become a focus area for Indian businessmen -- either to directly invest in Southeast Asia or use Southeast Asia to go into other countries. It will take time but it is happening."

But there are some who still feel that India's ties with ASEAN are moving too slowly, said Mr Pillai.

Mr Pillai added: "But one has to take into account the composition of the two sides. On the ASEAN side, we have ten members and we have to reach consensus before we can move forward. On the Indian side, they have their own pre-occupations in the region, domestically, so that also delays the process."

However, growth in one area between the two sides has been significant, said observers, and that is in the area of two-way trade.

ASEAN-India total trade reached US$75 billion last year, 43 percent more than what was achieved in 2010.

And one project which economists said needs more push is the ASEAN-India Free Trade Agreement.

Negotiations on the Services and Investment Agreements are still going on, said the former chief mentor of the Confederation of Indian Industries, Tarun Das.

Mr Tarun Das said: "When we are negotiating between ten countries on one side and one country on the other side, there are 11 countries involved, and each country is different -- each country has its own strengths, weaknesses and its own concerns.

"What you are seeing is an engagement to try and address all concerns, work out compromised solutions, find the right language to be with each one's agendas and issues.'

The leaders of ASEAN and India have set a new target of achieving US$100 billion in trade between both sides by 2015.

- CNA/lp

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