Top U.S. Department of Justice lawyers defended the non-prosecution agreement with UBS AG and the guilty plea of a Japanese subsidiary, calling the $1.5 billion global deal with the bank a “very robust, very real and very appropriate resolution.”

Prosecutors announced on Dec. 19 that the Japanese subsidiary of UBS was charged with felony wire fraud for its role in the long-running manipulation of a leading interest rate benchmark, the London Interbank Offered Rate, or LIBOR.

UBS, represented by a team from Gibson, Dunn & Crutcher, signed a two-year non-prosecution agreement with the Justice Department. Prosecutors in a related but separate case filed criminal charges in Manhattan federal district court against two former UBS traders. The government will seek their extradition.

Fearing potential “collateral consequences” of a criminal indictment against UBS, Switzerland’s largest bank, Justice Department officials said they weighed a variety of factors in deciding how to resolve the criminal allegations. The non-prosecution agreement recognized the bank’s cooperation with enforcement officials.

Read the DOJ’s statement of facts, non-prosecution agreement, and criminal complaint

“Our goal here is not to destroy a major financial institution,” Lanny Breuer, the assistant attorney general for the Criminal Division, told reporters in Washington at a news conference on Dec. 19. He trumpeted the bank’s commitment to compliance and the fact senior leadership has changed hands since the misconduct occurred.

The evaluation of any criminal case against a corporation, Breuer and Attorney General Eric Holder Jr. said, includes an assessment of the impact on financial stability around the world. Holder said Justice Department lawyers seek outside advice from experts about the consequences of enforcement action.

The bank’s attorneys, Gary Spratling in San Francisco, cochair of Gibson’s antitrust and trade regulation practice, and David Burns, a white-collar defense partner in Washington, could not be reached for comment. Sergio Ermotti, the UBS chief executive, said in a statement that the bank fully cooperated with authorities.

“During the course of these investigations, we discovered behavior of certain employees that is unacceptable,” Ermotti said. “Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee.”

Ermotti also said, “no amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”

Responding to a question from a reporter, Breuer said he rejected the notion that U.S. authorities failed to be as aggressive as possible in confronting the misconduct at UBS.

“I don’t know what tougher means,” Breuer said. “Today, we announced a criminal plea of a major financial institution, a Japanese subsidiary of a very major institution. We brought charges against two traders. We brought a very robust, real non-prosecution agreement. We have a $500 million penalty from the Justice Department.”

The global resolution also included a settlement with the U.S. Commodity Futures Trading Commission. UBS will pay a $700 million civil penalty.

The CFTC said that for at least six years UBS “regularly tried to manipulate multiple benchmark interest rates for profit.” The commission reported finding more than 2,000 instances of unlawful conduct involving dozens of UBS employees.

“Regrettably, with the announcement today of the CFTC findings against UBS, we have yet another blatant example of what bad actors can do when a benchmark rate’s underlying market becomes virtually nonexistent,” CFTC chairman Gary Gensler said in a statement.

Prosecutors said two former traders, Thomas Hayes of England and Roger Darin of Switzerland, were charged in a complaint that alleged a conspiracy to manipulate LIBOR. “There was nothing, nothing subtle about these traders’ alleged conduct,” Breuer said in his remarks Dec. 19 at the Justice Department.

Holder and other officials said that the LIBOR investigation remains ongoing and active. In June, London-based Barclays Bank PLC agreed to pay $160 million to resolve allegations of LIBOR manipulation. The bank also entered a non-prosecution agreement.

Plaintiffs attorney Michael Hausfeld, co-lead counsel in a class action that alleges a conspiracy to manipulate LIBOR, said in a statement that UBS’s liability admissions “are extraordinary as they reveal the magnitude” of the bank’s wrongdoing.

“While the fines paid by UBS are substantial, it is important to note that none of this money goes to the victims of UBS’s wrongdoing,” Hausfeld said. “UBS’s willingness to come forward early to resolve its liability with government regulators hopefully indicates a like willingness to compensate its victims, resolve its global civil liability, and restore its character and reputation as a trusted market leader.”

@|Mike Scarcella, a reporter for the National Law Journal, can be contacted at mscarcella@alm.com.