UBS AG Zurich / Basel, February 18, 2009, 11:45 PM UBS settles US Cross-Border Case with the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) UBS is resolving investigations relating to its US cross-border business by entering into a Deferred Prosecution Agreement (DPA) with the US Department of Justice (DOJ) and a Consent Order with the US Securities and Exchange Commission (SEC). Today, UBS announced that it has entered into a Deferred Prosecution Agreement (DPA) with the US Department of Justice (DOJ) and a Consent Order with the Securities and Exchange Commission (SEC). As part of these settlement agreements: * UBS will pay a total of USD 780 million to the United States, USD 380 million representing disgorgement of profits from maintaining the US cross-border business and USD 400 million representing US federal backup withholding tax required to be withheld by UBS, together with interest and penalties, and restitution for unpaid taxes associated with certain account relationships involving fraudulent sham and nominee offshore structures and otherwise as covered by the DPA. * UBS will complete the exit of the US cross-border business out of non-SEC registered entities, as announced in July 2008, which these settlements now allow us to do in a lawful, orderly and expeditious manner. * UBS will implement and maintain an effective program of internal controls with respect to compliance with its obligations under its Qualified Intermediary (QI) Agreement with the Internal Revenue Service (IRS) as well as a revised legal and compliance governance structure in order to strengthen independent legal and compliance controls. * Pursuant to an order issued by the Swiss Financial Market Supervisory Authority (FINMA), information will be transferred to the DOJ regarding accounts of certain US clients as set forth in the DPA, who, based on evidence available to UBS, appear to have committed tax fraud or the like within the meaning of the Swiss-US Double Taxation Treaty. Under the DPA, the DOJ has agreed that any prosecution of UBS be deferred for a period of at least 18 months, which is subject to extension under certain circumstances, such as UBS needing more time to complete the implementation of the exit of its US cross-border business. If UBS satisfies all of its obligations under the DPA, the DOJ will refrain from pursuing charges against UBS relating to the investigation of its US cross-border business. The agreements do not resolve issues concerning the pending âJohn Doeâ summons which the IRS served on UBS in July 2008. Additionally, FINMA published today the results of the investigation conducted by the Swiss Federal Banking Commission (SFBC). The SFBC concluded that UBS violated the requirements for proper business conduct, and it barred UBS from providing services to US resident private clients out of non-SEC registered entities. Further, the SFBC ordered UBS to enhance its control framework around its cross-border businesses and announced that the effectiveness of such a framework will be audited. The order by FINMA in support of the resolution achieved with the DOJ was instrumental in averting the imminent risk of further negative implications and uncertainties for the bank. "UBS sincerely regrets the compliance failures in its US cross-border business that have been identified by the various government investigations in Switzerland and the US, as well as our own internal review,â stated Peter Kurer, Chairman of UBS AG. "We accept full responsibility for these improper activities. We are firmly committed to the terms of the settlement agreements we have reached with the DOJ and the SEC. We are determined to fully comply with the terms of these agreements and will complete the process without delay. "Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused the confidentiality protections embedded in the QI Agreement with US authorities by providing false declarations regarding their tax status," Peter Kurer commented. "It is apparent that as an organization we made mistakes and that our control systems were inadequate," said Marcel Rohner, Group CEO of UBS. "We will strengthen our compliance programs. UBS seeks to achieve the highest standards of compliance throughout its organization and is committed to fulfilling its obligations under the laws and regulations in every country in which it operates." The cost for the settlement will be fully charged to the performance year 2008 and will be reflected in the audited results for 2008 to be published in March 2009. Terms of Use | Privacy Statement Products and services in these webpages may not be available for residents of certain nations. Please consult the sales restrictions relating to the service in question for further information. © UBS 2009. All rights reserved. Close Window Close
You can almost hear the sound of the jets taking off to leave the country with many many wealthy people who are now looking for a 'friendly' place to land.... Its too bad we have setup a system that is so greedy to tax its citizens that the citizens go to so much effort to hide their income.
Come on Robert. Who feels sorry for people who try to cheat the tax system in place? Countries have taxes. It pays for roads, justice, defense and a thousand other things. If these citizens feel so ill used, they are free to move to Zimbabwe, Gaza, or other modern cultures. The tax could have been 10%, and these same people would still try to figure out how to cheat the system.
The tax could have been 10%, and these same people would still try to figure out how to cheat the system. If it was really 10% it wouldn`t be worth the trouble, they probably pay 10% just to hide the money in opportunity costs, and ancillary wasted productivity. Can you honestly say that even a legitimate % of your taxes is used for non-wastful purposes----like roads, necessary services, etc. The government will never have enough money, they are constantly looking for new tax revenue streams, and yet they can never live within their means.
In all due respect, I disagree. What our recent culture has bred is a class of wealthy citizens who have a general aversion to paying taxes at any rate, however meager. They want to utilize the benefits their fellow citizens pay for through taxes, they just feel that they themselves are above paying taxes. They feel they are above being required to contribute their fair share because of how inherently special they are. Don't be shocked if you find these very same people who evaded taxes via the UBS scam to be the very same people who received TARP money. When that list finally comes out, the gag reflex will go into effect. The greedy government argument is getting old. If these miscreants paid their fair share, the rest of us wouldn't be shouldering their burden.
So UBS admits they are in fact no better than common street thugs. Maybe worse. Too Profitable âUBS executives knew that UBSâs cross-border business violated the law,â said R. Alexander Acosta, U.S. Attorney for the Southern District of Florida, in a statement. âThey refused to stop this activity, however, and in fact instructed their bankers to grow the business. The reason was money -- the business was too profitable to give up.â When they actually do bring back public hanging, you'll think of old stock, now won't ya?
I got a call a couple of months ago that UBS was crawling with Feds, and they would indict all the way to the top - that the CEO knew, and would be indicted. If the FIRM was indicted, it's curtains. They really didn't have any choice but to do this. And they still got off easy. the NYTimes reported that Justice was asked by the Fed to go easy, given the current crisis. I don't think they wanted to see the derivatives on the Street. What they should have done, was at least shut them down in the US, but I think they employ 20,000 people. That probably was a factor. But if they keep going easy on these guys, the public will scream. This hand slap stuff solves nothing, because we all know, if they were truly sorry, they never would have done it. Just answer this..........if the Russians did it, would anyone be sympathetic??? What if it were UBR? Union Bank of Russia? See! Wrong is wrong.