Two former UBS Libor traders have brought complaints against the FCA to the Complaints Commissioner over claims the regulator did not comply with its disclosure obligations.
An Upper Tribunal decision made last week relating to a case involving former UBS GBP rates desk head Arif Hussein refers to an ongoing complaint against the FCA.
According to the decision, the incident centres on whether material the FCA received for a US regulator would have triggered a three-year limitation period under the Financial Services and Markets Act for the FCA to bring proceedings.
The decision says: “Enforcement confirmed to Mr Hussein’s solicitors that they decided not to pursue the s66 case because of concerns as to whether material received for the CFTC, the relevant US regulator, may have triggered the commencement of the three-year limitation period prescribed by s66 earlier than had hitherto been thought to be the case.
“The authority acknowledged that the change in its position at this stage in the proceedings was unsatisfactory and accepted that it did not give adequate consideration to the potential impact of the contents of the documents received for the CFTC in their analysis of the limitation period. The Authority apologised for this but denied any bad faith on its part.”
Hussein also claims the regulator did not disclose information relating to a conversation with a manager where he raised concerns about the activities of traders at UBS.
The decision says: “Mr Hussein and Mr Koutsogiannis have complained to the Complaints Commissioner with respect to the authority’s conduct of their cases, the complaint centring around allegations of a failure on the part of the authority to comply with its disclosure obligations regarding the limitation period and (in the case of Mr Hussein) his conversation with Mr Leeming. Accordingly, Mr Hussein has no confidence that the authority has complied with its disclosure obligations.”
In April, the FCA sought to ban Hussein from any role in regulated financial services for allowing the bank’s trader submitters to make Libor submissions with the aim of benefiting UBS’s trading positions.
The tribunal decision was determining whether parts of Hussein’s case should be struck out and whether the FCA should be directed to disclose further documents. There will be a full hearing next year.
In the decision, Judge Timothy Herrington refused a disclosure request for some documents around the FCA’s decision and said Hussein must narrow his case.