It goes from bad to worse for UBS, maybe they need some help from the taxpayer.
UBS Faces U.S. Tax Evasion Probe; Employee Detained
By Otis Bilodeau
May 7 (Bloomberg) – UBS AG, Switzerland’s biggest bank, said
the U.S. Department of Justice is investigating whether the firm
helped clients evade U.S. taxes.
One senior bank employee was
briefly detained'' by U.S. authorities as a material witness,‘’ the firm said in an e-
mailed statement. The Financial Times reported that the employee
was Martin Liechti, the Zurich-based head of UBS’s international
wealth management business for the Americas. Rohini Pragasam, a
UBS spokeswoman in New York, declined to comment on the FT report.
Liechti could not immediately be reached for comment.
Battered by $17.3 billion of first-quarter losses at its
investment-banking unit, UBS said yesterday it plans to cut 5,500
jobs. The company said clients withdrew a net $12.2 billion from
its asset- and wealth-management divisions. German prosecutors
said in March they’re weighing a criminal investigation into
whether UBS helped clients evade taxes.
UBS has been hit by a perfect storm,'' said Edwin Merner, who oversees $2 billion as president of Atlantis Investment Research Corp. in Tokyo. Clients may run away if they think
they’ll leak information to tax authorities in Germany and the
The U.S. Securities and Exchange Commission is also
investigating whether UBS employees in Switzerland who advised U.S.
clients failed to register with the agency as required, according
to the bank’s statement.
UBS fell 4.5 percent yesterday in Swiss trading, the biggest
drop in four weeks, after clients withdrew more assets than they
added for the first time in almost eight years. Chief Executive
Officer Marcel Rohner told analysts he expects ``tough business
conditions,‘’ which already caused $38 billion of markdowns, to
Prosecutors in Mannheim, Germany, are considering opening a
criminal probe into allegations that UBS offered Germans help in
hiding funds from local tax authorities, the Mannheim Prosecutors’
Office said March 31.
UBS is also among banks investigated by U.S. state officials
into how they marketed auction-rate bonds to investors. Auction-
rate failures led to surging costs for some borrowers after
dealers stopped bidding for bonds investors didn’t want.
UBS announced yesterday that it will exit the U.S. municipal
bond market as part of an overhaul of its investment banking
operations. The $2.6 trillion municipal market had its worst start
in 12 years in the first quarter.
Is tax evasion not already receiving help from the tax payer… in a way…
You appear to have hit the target head-on, a conclusion which could be reached from a reading of the enclosed
Feeble government lets the superclass soar over the rest of us
The financial dimension is key. The superclass can only make the scale of money it does because of its capacity to do what it will with cash - borrow it, leverage it, move it across borders, take over companies with it and shelter it from taxation. Rothkopf says there were 21 financial institutions in 2007 managing assets of at least $1 trillion each and that the top 50 have assets in excess of $48.5 trillion. Their extraordinary freedoms are not natural, or economically efficient, as is now obvious post the credit crunch. They are the consequence of a 20-year-long lobbying campaign to win finance freedoms from national regulation and which are now used against governments to keep them in their place. Brown and Alistair Darling are having urgent discussions, for example, to reshape Britain’s corporate tax laws as companies start to move to Ireland to pay less taxation, a classic way the superclass exercises its power (and a classic government response in giving way). The superclass is super-rich - the top 1,000 are billionaires - is super-influential and super-confident. guardian.co.uk/commentisfree … my.economy
Who is paying for all this wooing of the rich; but our recent young highly leveraged mortgage holders who are finding that because of the small print, they have to pay extra interest over and above the ECB rate? The powers that be in this state love the multi million plus salary banking executives etc while we are left with an **External Debt of $2,340,800,000,000; that’s only about $563,233 for each man woman and child in the state, **taking our population as the CIA figure of 4,156,119 (July 2008 est.)
This all happened under the eyes of those people who frame 90% of our laws, the EU bureaucracy or is it a case that our leaders were codded, hoodwinked or had no fear of the consequences. There is only one thing for sure is that our government handed over control of the economy many years ago. **Irishmen and Irishwomen, hold your chests out; for we are the most Economic Free country in the world **
heritage.org/research/featur … ntries.cfm
This is not the first time that we scored high on the Index of Economic Freedom. I expressed my fears for our wee country by writing the following back in the year 2,000.
• “Ireland is ranked third in ‘economic freedom’ index,” a recent headline in our national papers. The irony here is that laissez-faire economics has a disastrous effect on a society when it is coupled with the availability of restrictions on the most natural occurring phenomenon in human nature i.e. conception. Children were generally mistakes before the 1960’s; they were seldom planned for, but came from the natural love of two people. People got married and had children, no lending institution would consider a mortgage based on their joint salaries. Children are now only born if they are needed. The usual argument in favour of artificial contraception is that a couple should have the right to limit their offspring to what is economically feasible. The choice of a young impressionable couple, in a ‘free economy’, is severely limited from an early stage; after being bombarded with very powerful advertisements for material comforts, via subtle TV sit-coms, or very straight forward advertisements, etc. The fact is that once they have acquired that four or five bedroom house, a car and all the other mod-cons, based on their joint salaries; they are unable to afford more than one or two children, if any at all. There are always couples who through no decision of their own are unable to conceive. The birth rate collapses when those who can conceive, postpone conception during their most productive years. The chances of conceiving after thirty years of age rapidly declines, given rise to the frantic search for other unnatural methods of human production e.g. test tube babies, cloning etc.
After two years of further investigations, Olenicoff’s evidence resulted this month in a dramatic development. UBS, the most powerful bank in Switzerland, is now on the edge of a steep cliff. Ten days ago, Bradley Birkenfeld, who between 2001 and 2006 was a senior UBS banker, signed a US court statement detailing how he smuggled diamonds in toothpaste tubes, deliberately destroyed offshore bank records on behalf of clients and helped Olenicoff evade taxes of $200m on offshore assets worth $7.26bn.
In an explosive seven-page deposition, Birkenfeld claims he was encouraged to win clients at UBS-sponsored tennis tournaments and major art events. UBS bankers, he said, assisted wealthy Americans to conceal ownership of their assets by creating ‘sham’ offshore trusts. Misleading and false documentation was routinely prepared to facilitate this, and the motivation, he concluded, was to ensure that UBS continued to manage a staggering $20bn of assets owned by wealthy US individuals, which generated the bank $200m in fees each year.
‘By concealing US clients’ ownership and control in the assets held offshore, [UBS] managers and bankers… defrauded the IRS and evaded US income tax,’ reads the statement. The US Department of Justice has scented blood and is moving in for the kill. UBS denies authorising or encouraging any breaches of applicable laws and regulations and has put out a statement saying it will fully cooperate with all authorities and address any issues raised by the investigation (see below). It is now faced with having to hand over details of its 20,000 US clients to the authorities.
Tax scandal leaves Swiss giant reeling
guardian.co.uk/business/2008 … bs.banking
UBS Considers Paine Webber Sale? - June 30