UBS says widens background checks for specialist employees

ZURICH (Reuters) - Switzerland’s biggest bank UBS said it had expanded the number of employees that are subject to internal background checks to around 15 percent of its workforce in a move that came in the wake of numerous scandals.

Raindrops cover the logo of Swiss bank UBS at an office building in Zurich July 29, 2014. REUTERS/Arnd Wiegmann

Under the new policy, roughly 9,000 employees of the Zurich-based bank will be subject to internal vetting, a spokesman for UBS told Reuters, confirming a report on Monday by Swiss finance website, Inside Paradeplatz.

UBS is beefing up policing of its employees as it grapples with a probe into potential rigging of the global foreign exchange market, including by the Securities and Exchange Commission, U.S. justice officials, and Britain’s Financial Conduct Authority.

The spokesman said UBS had already been vetting some current employees but would not confirm how many. He said the expansion was part of the bank’s operational risk strategy.

Senior management, including managing directors, will continue to be vetted. Under current checks, a larger number of specialist staff members with access to sensitive information will also be subject to criminal background checks, as well as scrutiny of their credit rating, UBS said.

Inside Paradeplatz reported that employees were told last Monday of the new system and that they have until Aug. 31 to return the necessary documents.

Foreign exchange trading represents the latest in a series of scandals at the Swiss bank, including a rogue trader which cost UBS more than $2 billion in 2011.

Two years ago, UBS agreed to pay $1.5 billion bribery in connection with efforts to rig benchmark interest rates, and last year it paid $885 million to settle allegations it misrepresented mortgage-backed bonds during the housing bubble.

The bank’s share price fell in June following a research report which said it could have to pay $8 billion in fines and settlements relating to the alleged collusion and price-manipulation in the global currency market.

(This story has been refiled to correct typographical error in first paragraph)

Reporting by Joshua Franklin; editing by Shadia Nasralla