| NEW YORK
NEW YORK UBS AG's army of U.S. brokers say they are being asked to apologize once again for the sins of their big European parent.
Following the Swiss bank's admission on Wednesday morning that it would pay $1.5 billion for fraud, bribery and rigging the London Interbank Offered Rate, the firm's 7,000 U.S. brokers and branch managers received an e-mail from their boss with a message for clients and potential recruits.
"Many of you have asked me what I will say to clients, prospects, recruits, family and friends who ask about the Libor settlement and its impact on me and WMA," wrote Bob Mulholland, head of wealth management and investment solutions at UBS Wealth Management Americas. "Here are the main points I will use in these conversations."
He followed with six bullet points that progressed from a quick apology -- "The behavior of some of our employees is unacceptable" -- to five ways U.S. colleagues can distance themselves from a crisis that includes criminal charges lodged by the U.S. government against senior UBS traders.
"We work for another UBS subsidiary....had no involvement in this misconduct," Mulholland wrote.
The headline-making settlements with global regulators will have "little or no impact on U.S. Management Americas' business," he continued. Even after paying the billion-dollar fine, UBS AG remains one of the world's "best-capitalized" banks.
The brokerage executive also noted that the bank has overhauled its top management team and compliance procedures.
A UBS spokeswoman confirmed the contents of the e-mail and declined further comment.
UBS ambled into the U.S. brokerage business in 2000 when it bought PaineWebber. But its adviser force has been dealing with negative news relating to its parent since the financial crisis of 2008. The bank lost more than $50 billion in a U.S. hedge fund business. It also suffered after it sold auction-rate securities to retail investors that became illiquid. In 2009 and 2010, the firm settled charges of helping wealthy Americans evade taxes.
A $2 billion rogue trading scandal discovered last year led to the overturn of the bank's top management. The firm abandoned its once-powerful bond trading business globally to focus on wealth management. Several brokers said that 2012 was the first year in many in which they felt some relief from headline anxiety.
One adviser on Wednesday morning said two or three clients had already discussed the Libor issue with him, while another said none of his clients raised the subject.
The Libor rate, based on what banks charge each other for loans, is a benchmark used to price everything from corporate loans to the mortgages that some UBS brokers sell. One broker, without advice from Mulholland, said he told clients that in most cases UBS traders underpriced Libor so they would not have been hurt by rates they were charged.
In imposing the $1.5 billion penalty, Switzerland's bank regulator said UBS traders underpriced and overpriced their real Libor costs to both disguise the precariousness of the bank's financial condition and to enhance proprietary trading positions.
"I remain extremely proud to work for UBS Wealth Management Americas," Mulholland wrote at the end of his e-mail. "I hope this helps. Please call if you need me."
(Reporting by Jed Horowitz and Jennifer Hoyt Cummings; Editing by Dan Grebler)