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Finma appeals to Supreme Court

Bern, Switzerland (GenevaLunch) – Switzerland’s financial market supervisory authority, Finma, has decided to appeal to the country’s supreme court in the UBS client data case. A lower court had found it acted wrongly in ordering UBS to turn over the names of 300 of the bank’s US clients to the US tax authorities in February 2009.

Finma’s board voted 21 January to take its case to the Federal Supreme Court, saying it (Finma) “is using the opportunity to have Switzerland’s supreme court pass judgment on the extent of the Financial Market Supervisory Authority’s legal latitude in crisis situations.”

The Federal Administrative Tribunal had found 5 January that Finma did not have sufficient legal basis to oblige UBS to turn over the names to the IRS. The court argued that Finma exceeded its authority under the two articles of the Swiss banking act it invoked to justify its decision. Switzerland’s cabinet, the Federal Council, entered the fray 13 January by siding with Finma in the case. Finma had consulted with the government prior to handing down its decision to UBS last year.

The Swiss banking act‘s articles 25 and 26 give Finma certain powers to intervene if a bank is in serious trouble, which both Finma and the Federal Council deemed to be the case when the US Department of Justice announced measures against UBS in the USA that may have threatened its existence.

Background: “Swiss court’s UBS decision could go another round“, 14 January 2010, GenevaLunch