The US has sent a bill for $69 million to BP for the Gulf of Mexico oil spill that appears closer to being plugged, but which is still leaking. US President Barack Obama said on the Larry King TV show that he had not seen the kind of rapid response from BP that he would have liked, and he canceled a trip to Asia because of the continuing oil spill problems.
Links to other sites: Miami Herald, New York Times, Times, UK
Miami, Florida (GenevaLunch) – Some said it was a ragtag team of losers, but those voices died down when New Orleans won the Super Bowl for the first time in the US football game’s history. The Saints defeated the Indianapolis Colts for the National Football League (NFL) title, 31-17. Drew Brees was named Most Valuable Player. The Shreveport Times celebrated with a “Won dat Supa Beauxl” headline and Ad Age celebrated by offering the public all the ads from the game as videos online.
Links to other sites: Ad Age, Super Bowl ads, Reuters, Shreveport Times,
Zurich, Switzerland (GenevaLunch) – Cost-cutting is given as the reason for bank UBS’s decision to close the UBS Art Gallery it opened in New York City in 1986, Bloomberg reports. The bank has not issued a formal announcement. The decision does not affect the bank’s continuing sponsorship of the Basel Art fair, one of the contemporary art world’s major exhibitions, and its twin, Art Basel Miami Beach, bank spokesperson Kelly Smith told Bloomberg. UBS has been the major sponsor of the Basel show since 1994.
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
A Miami, Florida man and two unnamed other men were indicted by US federal authorities in what is being called the largest case of credit card theft ever. Albert Gonzalez and the two other men, said to be Russians, allegedly hacked into computers at Heartland Payment Systems, a credit card payment processor, and stole credit and debit card details from 130 million customers. They also obtained information from 7-Eleven stores and another supermarket chain, Hannaford Bros. Gonzalez is in prison on other, related charges. Last year, Gonzalez was recruited as an informant by the US Secret Service which was investigating an international hacker gang called the Shadowcrew. Authorities subsequently realized that Gonzalez was involved in the criminal activity. Bloomberg, Miami Herald, Reuters
Zurich, Switzerland (GenevaLunch) – Parties involved in the negotiations for a settlement in the UBS court case in Miami, Florida, USA – the Swiss and US governments as well as the bank itself – have agreed to total silence on details of the agreement they are working out while the negotiations continue, in theory to 7 August. But the ban on information is not keeping media from speculating, always citing unnamed sources which are usually called sources close to the negotiations.
UBS New York headquarters
Update 3 17:25 Bern and Zurich, Switzerland/Miami, Florida and Washington, DC, USA (GenevaLunch) - Shares in UBS rose more than 4 percent in the minutes following the news that Switzerland and the UBS have reached an Agreement in Principle in the civil case brought by the US Treasury department against Swiss bank UBS. The case will now be settled out of court, the Swiss government says in a statement issued late Friday afternoon. (background)
The two governments have reached an agreement in principle on the major issues in the case involving UBS and the IRS tax authority, US Justice Department attorney Stuart Gibson told the judge presiding over the case Friday 31 July. Neither he nor Judge Alan Gold provided details about the agreement, and the Swiss government says that “confidentiality has been agreed for the full duration of the negotiation process.”
Some early media reports noted that the judge has postponed the evidentiary hearing, whose opening had been delayed to Monday 3 August, until a week later, 10 August, with the parties scheduled to hold a status conference 7 August. But according to the Swiss government, the court has simply asked for an update on the details of the settlement Friday 7 August, and has scheduled a conference for this purpose.
Swiss Foreign Minister Micheline Calmy-Rey and US Secretary of State Hillary Clinton meet today in Washington, DC.
Update 15:40 Bern, Switzerland (GenevaLunch) – Swiss authorities are investigating charges by a US man, who has pleaded guilty to tax evasion in the US, that a Swiss government official was bribed to provide his lawyer with information on the UBS court case. The information purportedly indicated, incorrectly, that his name was not among the 250 that UBS would eventually gave to IRS tax authorities in the US.
Reuters notes that bribery is extremely rare in Switzerland and the accusations have prompted concern in Bern, the capital, and among banking circles. Transparency International in its latest (2008) bribe payers’ index, puts Switzerland near the top of the list of relatively corruption-clean countries.
Earlier in the day 29 July Swiss media carried a report from wire service ATS that Alan Gold, the judge in the UBS bank case in the US, has scheduled a meeting by telephone Wednesday with the US Justice Department and Switzerland, to clarify progress being made towards an out of court settlement. The two parties to the case were encouraged by the judge 13 July to explore a settlement in the case where the IRS tax authority is demanding the names of 52,000 holders of UBS bank accounts.
In related news:
- a UBS client in the US, Jeffrey Chernick of New York, Tuesday 28 July pleaded guilty to fiscal fraud, saying that a Swiss lawyer had talked him out of turning himself in and paying back taxes in October 2008. The lawyer, according to Chernick’s court statement, assured him that a Swiss government official said his name was not on a list that would be given by the bank to the IRS. The attorney told Chernick the government official was paid CHF45,000 for the information. Chernick is the third person to plead guilty to tax evasion charges, from the group of 250 whose names were given to the IRS in February. Chicago Tribune and RSR, Fre
- former head of the UBS wealth management unit in the US, Joseph Grano, says that in early 2008, before the bank’s problems with the IRS were public, he wrote to the bank’s then-chairman and president, Marcel Ospel and Marcel Rohner, suggesting they spin off the unit, but they never replied. Bloomberg
Update 27 July 11:15, Geneva, Switzerland (GenevaLunch) – US authorities may be taking a new approach to going after the names of US-based clients of Swiss bank UBS. They are reportedly asking for the names of clients its advisors saw in the US. Reuters carries a lengthy article that states this, citing Swiss newsweekly Sonntagszeitung.
The move, if confirmed, may be a compromise in the legal dispute involving UBS and the US tax authority IRS, which wants the bank to divulge details on 52,000 of its US clients. Reuters reports that 60 UBS client advisors visited the US on average three times a year, for three weeks each visit, and saw four clients a day. John DiCicco, acting assistant attorney general in the tax division of the US Justice department, in March 2008 testified to a senate subcommittee investigating the case that “An internal UBS memorandum filed with the court demonstrates that, in 2004 alone, UBS bankers traveled to the United States where they held approximately 3,800 separate meetings with US clients to discuss their clients’ Swiss accounts. (Ed. note: the Sonntagszeitung article speculates that UBS hopes that the US Dept. of Justice may acccept the names of clients visited by UBS client officials as a way to avoid violating Swiss law by having to hand over all client data demanded by the IRS).
The number of account holders has been an issue since the case began, with the US putting forth the number of 52,000 US citizens evading taxes through UBS accounts as an educated guess.
DiCicco, using provocative language, made the announcement in February 2009 that the Department of Justice was seeking 52,000 client names from the bank, a day after the DOJ and UBS appeared to have reached an agreement.
The DOJ statement sparked the diplomatic and legal standoff between the two countries, moving the issue from a banking one into a diplomatic tiff over the bilateral tax treaty.
Bern, Switzerland (GenevaLunch) - Micheline Calmy-Rey, Switzerland’s minister for foreign affairs, will meet with Hillary Clinton, US Secretary of State, in Washington, DC, 31 July. The two countries and Swiss bank UBS have been given until 3 August by a US federal court judge in Miami, Florida to find an out-of-court settlement for the IRS legal demand that the bank hand over client information on 52,000 accounts. The Washington Post carries an editorial that says the issue is emotional on both sides:
Update 2, 23:15 Zurich, Switzerland and Miami, Florida, USA (GenevaLunch) – News agency AWP mistakenly published a report Sunday, which was then widely circulated by world media, saying that UBS has been informed by US district court judge Alan Gold in Miami that he will delay hearings scheduled to start tomorrow morning in Miami. The judge is presiding over the case brought by the IRS against the Swiss bank to obtain the names of 52,000 bank clients.
The bank has clarified that a letter written to the judge jointly by the bank and the US government, asking for a delay, will be presented to the judge Monday when the hearing is scheduled to open. The two parties in the case have agreed to ask for the delay to allow the US Justice Department and UBS more time to try to negotiate an out-of-court settlement. Late Sunday night Swiss time the Swiss Foreign Affairs Department confirmed that it supports the request to delay but notes that the negotiations are confidential and no other information will be forthcoming.
Media reports initially noted that the request was filed today, Sunday, which is not correct. AWP/TSR.
Washington, DC and Bern, Switzerland (GenevaLunch) - US federal district court judge Alan Gold, who is handling the case of the US Justice Department against Swiss bank UBS, has asked the American government to clarify its position, reports Swiss financial news agency AWP.
Bern, Switzerland (GenevaLunch) – The Swiss government Wednesday 8 July issued a terse statement saying it replied to a US federal court in Miami, Florida that UBS, Switzerland’s largest bank, cannot under Swiss privacy laws share client data. The statement adds that “the government of Switzerland also points out that the necessary measures to implement Swiss law have been prepared”, without providing details.
Washington DC, USA (GenevaLunch) – Swiss negotiators from the Federal Department of Finance met their US counterparts in Washington Tuesday 16 June to hammer out a new double-taxation treaty between the two countries. Time is of the essence: Switzerland wants to get off the Organization of Economic Cooperation and Development’s (OECD) gray list of non-compliant states, and both sides need to find a way around the US tax authority’s (IRS) demand for the names of 52,000 US clients of UBS bank. The case is currently being tried in a Miami, Florida courtroom. Switzerland would like the US to drop its charges against UBS, reports Le Temps.
Florida, USA and Bern, Switzerland (GenevaLunch) - The Swiss government has asked a court in Miami, Florida to reject demands by US tax authorities that Swiss bank UBS turn over information on 52,000 clients of the bank who are US citizens. The Swiss government says its amicus curiae brief explains its legal position: that the John Doe “fishing expedition” request flies in the face of international law and would oblige the Swiss bank to break Swiss law.
The government notes that the filing does not involve it, however, as a party in the case, but rather allows it to state its position, following US procedural law.
Miami, Florida, USA (GenevaLunch) – Roger Federer’s power was back in Miami where the home crowd noisily cheered on their favourite, American Andy Roddick. Swiss player Federer won his 17th match out of 19 with the American, 6-3 4-6 6-4. Federer will face Serbian Novak Djokovic in the semi-finals of the Sony Ericsson Open. Details, Reuters
