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UBS looks to ethics code to guide bankers’ behaviour
Court ruling against supervisory body opens door to client lawsuits
Zurich, Switzerland (GenevaLunch) – UBS, one of Switzerland’s two large banks, has issued a new code of conduct aimed at its employees and its board of directors, noting that the “Code defines the way UBS does business.” The document is the company’s latest effort to turn itself around after significant outflows of client funds under management, both in Switzerland and abroad, and sluggish share prices for over a year.
UBS operations in the United States were seriously compromised after it admitted to the US Justice Department that it had encouraged some US clients to evade paying taxes. UBS paid a $780 million fine as a result, in an agreement signed in February 2009.
One of its former US wealth division managers, Bradley Birkenfeld, has just begun a 40-month prison sentence in Pennsylvania for the same crime.
Profits likely up, reputation “most valuable asset”
Analysts have been reporting this week that UBS appears to have a profit in the final quarter of 2009, the first in more than a year, but the bank has declined to comment. It will post 2009 results 10 February.
In the new code’s preface, Chairman of the Board Kaspar Villiger and Group CEO Oswald Gruebel say that “in the new UBS we will uncompromisingly treat our reputation as our most valuable asset and we will protect it fiercely.”
Bradley Birkenfeld (photo: National Whistleblowers Center)
Miami, Florida, USA (GenevaLunch) – UBS manager turned informer Bradley Birkenfeld will go to prison 8 January after a judge turned down his appeal for clemency Monday 4 January. US District Judge William Zloch also refused to consider further appeals, reports Swissinfo, in a feature on the impact of Birkenfeld’s case and that of a French former HSBC employee. Both have given their governments information on clients held by banks based in Switzerland, a crime under Swiss law.
Birkenfeld has argued that he should not be sent to prison because he brought the IRS, US tax authority, information on some 19,000 clients. But prosecutors have argued that “he failed to disclose his own crimes”, says Swissinfo.
His request to receive whistleblower awards that could amount to several million dollars is under consideration by the IRS Whistleblower Program. The National Whistleblowers Center’s attorneys have been representing Birkenfeld. They issued a statement 30 December calling on all Americans to write to the attorney general to stop Birkenfeld going to jail, saying it will send the wrong message.
Links to other sites: US National Whistleblower Center, Swissinfo
New York, NY, USA (GenevaLunch) - Bradley Birkenfeld, the former UBS bank wealth manager who shared 19,000 bank client names with the IRS, US tax authority, appeared on CBS television Sunday night, lamenting his prison term. Birkenfeld is scheduled to go to prison 8 January to begin serving a 40-month prison sentence for his part in defrauding the IRS. He could exit prison a wealthy man thanks to rewards from the IRS Whistleblower programme. He told the television interviewer that he believes it is unfair he should be the only banker to go to prison in connection with the case.
Background, GenevaLunch
Links to other sites: CBS 60 Minutes show, TSR (Fre)
Miami, Florida, USA (GenevaLunch) – Bradley Birkenfeld, the former UBS wealth manager in the US who set off a court case between the US tax authority, the IRS, and Switzerland’s largest bank, says he is ready to give more evidence. Birkenfeld, who stands to benefit from the IRS Whistleblower programme, is scheduled to go to prison 1 January to start serving a 40-month sentence. He has asked a Florida court to delay the start of his sentence in exchange for cooperating more extensively with the IRS, reports Swiss news agency TXT/TSR.
Background, GenevaLunch
Basel, Switzerland (GenevaLunch) – The Miami offshoot of the Basel Art fair has since 2002 been a place where wealthy clients and would-be customers of Swiss bank UBS could expect to be lavishly wined and dined in carpeted tents. The bank is the main sponsor of the US version of the contemporary art show in Switzerland, of which it is the sole sponsor. This year UBS has canceled what Bloomberg regards as its signature extravaganza event.
Geneva, Switzerland and Washington, DC (GenevaLunch) - US Attorney General Eric Holder is being urged to review the case of Bradley Birkenfeld, the former UBS banker whose testimony was instrumental in the US government’s case of tax fraud against the Swiss bank. Birkenfeld was sentenced in August 2009 to 40 months in prison for his role in aiding his clients to avoid paying taxes in the USA.
See also: part 2 – Taxes overboard! Americans reconsider the IRS at the Geneva T party
and part 1: US-Swiss treaty details may not come in time to help US citizens abroad
[Update 3, 21 September: note that the IRS has announced it will delay the deadline to 15 October 2009, from 23 September - details here; correction added to point 5 below] Geneva, Switzerland (GenevaLunch) – US citizens and greencard holders living outside the US should be aware of new tax rules, but also new enforcement procedures, according to several groups and tax experts who organized a taxpayers’ information evening 2 September in Geneva: American Citizens Abroad, Democrats Abroad and Republicans abroad. Many US taxpayers living in Switzerland and elsewhere have only gradually become aware during 2009 that the IRS (US tax authority) has imposed new rules, a six-month amnesty that ends 23 September and it is taking a tougher stance with “non-compliant” taxpayers. Rumours have been thick on the ground, but hard facts few.
See also: part 1 – US-Swiss treaty details may not come in time to help US citizens
part 3 – What has changed for US taxpayers living abroad
[Update 3, 21 September: note that the IRS has announced it will delay the deadline to 15 October 2009, from 23 September - details here]
Geneva, Switzerland (GenevaLunch) - Many US taxpayers living in Switzerland and elsewhere have only gradually become aware during 2009 that the IRS (US tax authority) has imposed new rules, a six-month amnesty that ends 15 October and it is taking a tougher stance with “non-compliant” taxpayers. Rumours have been thick on the ground, but hard facts few.
The Geneva T for taxes party
The situation came to a head at a highly emotional meeting in Geneva Wednesday evening 2 September, when 200 American expatriates, citizens and green card holders, gathered at Webster University to learn about recent shifts in the tax situation, what has brought it about and what the implications are.
See also: part 2 – Taxes overboard! Americans reconsider the IRS at the Geneva T party
part 3 – What has changed for US taxpayers living abroad
[Update 3, 21 September: note that the IRS has announced it will delay the deadline to 15 October 2009, from 23 September - details here]
Geneva, Switzerland (GenevaLunch) - The Swiss government announced Friday 11 September that it is authorizing its finance and foreign affairs ministries to sign a new double taxation agreement with the US to replace the current one, which dates back to 1996. The step may ease nervousness among some Americans in Switzerland and elsewhere outside the US – as long as it means that details of the new treaty are published soon.
A Swiss government spokesperson told GenevaLunch 11 September that it’s impossible to know when the two Swiss departments will actually sign the treaty. Parliament retains the right to vote on it, as well, once the departments sign, and as yet there is no clear indication if parliament will or will not exercise this right.
Some US citizens and greencard holders who live overseas know that they are considered non-compliant under IRS (US tax authority) rules which are being more stringently enforced in 2009, and they are debating coming in from the cold. Others are only becoming aware they may not be fulfilling their US tax obligations, even though they assumed they were.
Zurich, Switzerland and Miami, Florida (GenevaLunch) – Bradley Birkenfeld was sentenced Friday in Miami, Florida, USA to three years and four months in prison plus a $30,000 fine and three years on probation following his prison term. He is the former UBS banker whose revelations to the IRS, the US tax authority, set off an investigation that led to bank UBS being taken to court and the US and Switzerland negotiating a treaty whereby the Swiss government will authorize the bank to release details of more than 4,000 client accounts. Full story
Update 18:08 Zurich, Switzerland and Miami, Florida (GenevaLunch) – Former UBS banker Bradley Birkenfeld was sentenced to 40 months in prison by a US court 21 August for helping to defraud the US government. He was also fined $30,000 and given three years probation after the prison term.
The sentence was harsher than expected. The prosecution had been demanding 30 months imprisonment, given Birkenfeld’s cooperation with the prosecution in the UBS tax evasion case.
Shares up; Swiss bankers hire US lobbyist
Zurich, Switzerland (GenevaLunch) - It may be no more than rumour based on several unnamed sources being cited, but the financial world is now expecting the Swiss and US governments to sign on Wednesday an agreement involving Swiss bank UBS. The bank’s shares have continued to climb most of this week, reaching the level they were at in December 2008 before the bank agreed to hand some names to the IRS tax authority, in early February. UBS shares closed in Zurich at CHF16.90 Tuesday 19 August.
Once the agreement is signed by both parties, details can be released. Widespread speculation by industry observers and media has UBS delivering some 5,000 clients’ details to the IRS, but the figure could take on a new aspect with the IRS specifying Tuesday 19 August that it is now investigating for criminal activity 150 of the 252 client names provided to it by the bank in February 2009.
