Are you an Archegos-type investor???
Swiss bank UBS has been ordered to pay a fine of nearly $350 million to the US and UK central banks due to the risky behavior of the acquired bank, Credit Suisse.
Earlier this year, UBS acquired its competitor, Credit Suisse. Credit Suisse had engaged in transactions with the investment fund Archegos, which collapsed due to its risky behavior.
Archegos took significant financial risks in the stock market (Don't be an Archegos-type-investor), resulting in heavy losses. Credit Suisse acted as one of the intermediaries for these transactions. The Archegos affair cost the bank billions of dollars, and UBS also suffered losses in the hundreds of millions of dollars.
The Federal Reserve has accused Credit Suisse of misconduct and "unsafe and unsound practices." The Bank of England's regulator stated that the Swiss bank "failed to adequately address raised concerns."
As a consequence, the Federal Reserve has imposed a fine of nearly $269 million on UBS, and the Bank of England has imposed a fine of £87 million. Together, these fines amount to approximately €350 million.
In May, UBS had already set aside $4 billion for potential legal actions arising from the acquisition of Credit Suisse.
Regardless of this news, I think that UBS is performing rather well. Theyset aside a huge amount of money to be able to handle these legal actions. The stocks are still nicely in green and I think this news will have minimum impact on the value.
What kind of investor are you? Are you an Archegos-investor, who takes huge risks? Or are you more like an UBS-investor, who is prepared for things to come? Let me know in the poll and/or comments!
(For those wondering: I consider myself more of a UBS-type)
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$UBS (UBS Group AG)$UBSG.ZU (UBS Group AG)$SLHN.ZU (Swiss Life Holding AG)$SREN.ZU (Swiss Re AG)... Show More
