Trader communications showed UBS employees rigged the London Interbank Offered Rate. Internal messages revealed systematic manipulation affecting trillions in global transactions.
“UBS submits LIBOR rates based on genuine market conditions and does not engage in rate manipulation”
From “crazy” to confirmed
The Claim Is Made
This is the moment they called it crazy.
The rate that underpins trillions of dollars in global financial transactions was being rigged by one of the world's largest banks. Between 2005 and 2009, traders and managers at UBS systematically manipulated the London Interbank Offered Rate—known as LIBOR—to boost their own trading profits and minimize losses during the financial crisis.
LIBOR is the interest rate at which major banks lend to each other overnight. It sounds technical, but it affects everything: mortgages, student loans, credit card rates, and derivatives contracts. When banks rig it, they're essentially stealing from everyone holding these financial instruments. Trillions of dollars in transactions globally are priced off LIBOR daily.
The initial claims came from market observers who noticed suspicious patterns in how UBS was reporting its borrowing costs. Something didn't add up. If banks were truly lending at the rates UBS was claiming, the math on other financial instruments should have worked differently. Skeptics and financial analysts began asking questions, but the banking industry initially dismissed concerns as conspiracy-minded thinking from people who didn't understand complex markets.
The official response from UBS and banking regulators was dismissive. Banks claimed the process was sound, citing the voluntary nature of submissions and the expertise of their traders. Regulators who oversaw LIBOR insisted everything was working as intended. The system had been operating since 1986 without major scandals. What could possibly be wrong?
Then came the evidence. In 2012, the Financial Conduct Authority and the U.S. Department of Justice released internal communications from UBS traders and their supervisors. These weren't vague suspicions—they were direct messages where traders explicitly asked colleagues to adjust LIBOR submissions for profit. One infamous email had a trader asking: "If you know how it transpires, do us a favor mate. I'm trying to keep the london guys happy."
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The documentation showed a systematic operation. Traders would coordinate with colleagues at other banks, manipulating submissions to benefit their positions. During the 2008 financial crisis, UBS even suppressed its reported borrowing costs to hide financial weakness from the market. The scheme involved dozens of employees across multiple offices, suggesting knowledge extended well up the management chain.
UBS paid $1.5 billion in fines—the largest penalty for financial manipulation at that time—and three executives eventually faced criminal charges. The scandal led to a complete overhaul of how LIBOR was calculated, moving from voluntary bank submissions to transaction-based data. Dozens of other banks faced investigations and paid billions in penalties for similar conduct.
The LIBOR scandal matters because it proved that the world's largest financial institutions were willing to commit fraud on a massive scale affecting billions of people. It revealed that internal controls at mega-banks were theater, that supervisors either ignored or encouraged manipulation, and that regulators had no real oversight of the system they claimed to monitor.
Most crucially, it exposed how claims dismissed as paranoid turned out to be documented reality. When people questioned whether banks could possibly manipulate something as fundamental as LIBOR, they were told they were naive. The truth was documented in emails the entire time. That gap between public assurance and internal reality—that's what should concern us about financial institutions we're told to trust.
Beat the odds
This had a 0.3% chance of leaking — someone talked anyway.
Conspirators
~50Network
Secret kept
13.4 years
Time to 95% exposure
500+ years
