A former UBS trader whom the Financial Conduct Authority wants to ban over alleged Libor rigging has accused the City regulator of gross misrepresentation and making him a scapegoat.
Arif Hussein is appealing against the FCA’s decision to describe him as not being a “fit and proper person” and ban him from holding regulated roles in the future.
He is the first Libor trader to take his case to the upper tribunal, a form of appeal against decisions made by the FCA, which found that Hussein acted “recklessly and so lacks integrity”.
The FCA’s decision notice said that Hussein, who was a derivatives trader at UBS, had been “closing his mind” to the risk that Libor submitters could influence rates to suit trading positions.
The decision notice said: “Mr Hussein, who was a derivatives trader at UBS in London, understood that it would be improper for trader-submitters to make Libor submissions with the aim of benefitting trading positions of UBS. However, between 28 January and 19 March 2009 he informed [sterling] trader-submitters of his preferences for [sterling] Libor rates [on the basis of his trading positions].”
Hussein, however, said the FCA had reached its conclusion despite the fact that he had reported concerns to his boss, who was apparently unconcerned.
Hussein said he had been ordered to communicate his submissions to colleagues and required to upload his trading positions on to a spreadsheet. He had never met the person he found out was a Libor submitter.
David Hamilton, a senior associate at the law firm Stephenson Harwood, said: “Given the FCA’s senior manager regime’s imminent arrival, it is astonishing it should have singled out Mr Hussein as the regulatory scapegoat.”
Hussein joined UBS in October in 2000 and resigned in March 2009.
UBS declined to comment.
