Feds sue UBS for 52,000 american customer names

UBS AG, Switzerland’s largest bank, agrees to pay US$780 million and disclose account information to the U.S. Government after admitting to helping American clients evade taxes.

The UBS Tower in Chicago

The UBS Tower in Chicago

UBS has a major presence in the United States, with its American headquarters located in New York City (Investment banking); Weehawken, New Jersey (Private Wealth Management); and Stamford, Connecticut (Capital markets). UBS’s retail offices are located throughout the U.S., and in over 50 other countries.

In 2007, after incurring huge losses, UBS was forced to turn to the Government of Singapore for fresh funding. Since then, the largest shareholder of UBS is Government of Singapore Investment Corporation.

In November 2008, following further dramatic losses, UBS managers pledged to return bonuses. UBS shareholders voted to accept financial aid from the Swiss government, to restore the shaken trust in UBS.

In some ways, UBS has evolved on a similar path to its cross-town rival Credit Suisse. Both are Swiss commercial and retail banks which bought major U.S. investment banks and both are currently investigated by U.S. authorities for allegedly helping 17,000 American citizens to evade taxes.

In an unprecedented move on 18 February 2009, UBS, based on an order by the Swiss Financial Markets Supervisory Authority (FINMA), has agreed to immediately provide the United States government with the identities of, and account information for, about 250 American clients and to pay US$780 million in fines and restitution.

On 19 February, the U.S. government filed suit against UBS to reveal the names of all 52,000 American customers, alleging that the bank and these customers conspired to defraud the IRS and federal government of legitimately owed tax revenue.

If UBS does not comply with the approved summons, it could be in default of its deferred prosecution agreement, potentially opening itself and its senior executives to indictment.

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