The Financial Conduct Authority (FCA) said in April 2016 that it planned to ban Arif Hussein for alleged complicity in attempts to skew the bank's Libor (London interbank offered rate) rates between Jan. 28 and March 19, 2009.
Hussein, 38, who has opened a burger restaurant in London since leaving the Swiss-based bank in 2009, denies dishonesty and reckless behaviour and alleges communications with colleagues about Libor rates were routine and consistent with good practice, according to court documents seen by Reuters.
"His participation was not only permissible but mandated, sanctioned by the words and conduct of his senior managers
and the policy of the bank," Sara George, a lawyer from Stephenson Harwood who is representing the former sterling swaps trader, said in the court filings seen by Reuters.
"It was not reckless to follow the instruction, example and policy of the senior management of the bank."
The FCA and UBS declined to comment.
The civil case, which began on Tuesday, is being heard by the Upper Tribunal, a body that deals with challenges to FCA notices. Lawyers are not expecting a judgment imminently.
When announcing its proposed ban in April 2016, the FCA had said Hussein "understood that Libor submissions should not be made for the benefit of trading positions" and "closed his mind to the risk" that his preferences for the Libor rates could influence submissions. "In so doing he acted recklessly and lacked integrity," the FCA said.
Authorities have fined 11 financial institutions around $9.0 billion and charged about 30 people in a global inquiry into how banks set rates such as Libor and Euribor, which determine the rates on trillions of loans and financial contracts globally.
The FCA, along with U.S. and Swiss counterparts, fined UBS a total of $1.5 billion over Libor conduct in 2012. UBS said at the time it regretted what it called "inappropriate and unethical behaviour."
The case is listed until Jan. 9.
(Reporting by Kirstin Ridley. Editing by Jane Merriman)
By Kirstin Ridley