|Page 2 of 2 <|
UBS to Pay $780 Million Over U.S. Tax Charges
A Swiss regulatory agency painted a more benign picture of UBS's conduct yesterday, saying it found no indication that the bank's top management knew of legal violations. The improprieties involved "a very small number of cases," the regulator said.
The tradition of bank secrecy that was at stake in the case has been one of the pillars of the Swiss economy.
That standard had already taken a hit in the investigation. As The Washington Post reported last year, UBS has been closing the accounts of U.S. clients, in effect forcing them out and showing that depositors cannot depend on the bank to shield them. UBS previously turned over names on dozens of clients.
With the closure of their accounts, clients who evaded taxes and must now move their money are left in a difficult position, according to tax lawyers. They can come clean with U.S. authorities, or they can hide their money again, which could leave them even more vulnerable to prosecution, the lawyers said.
Also left unclear was whether the U.S. government will seek to hold anymore UBS personnel accountable. Executives "at the highest levels of management," as well as lower-ranking managers and employees, are unindicted co-conspirators, according to yesterday's filings.
In 2006, executives rejected an internal recommendation that UBS stop providing Swiss accounts to U.S. clients, the government alleged. UBS executives considered that step too costly, the government charged.
That business generated annual revenue of up to $200 million for UBS, according to estimates in yesterday's court filings.
One top executive, Raoul Weil, was indicted in November for allegedly conspiring to defraud the U.S. government by helping thousands of U.S. clients hide assets from the IRS. At the time, the Justice Department said he was believed to be in Switzerland, where he was legally protected from extradition. In a statement yesterday, an attorney for Weil predicted that Weil will be vindicated.