Swiss Ruling May Foreshadow Lawsuits Against UBS
– By Arden Dale; Dow Jones Newswires;
NEW YORK (Dow Jones)–A court ruling ordering the Swiss financial regulator to turn over documents to U.S. customers of UBS AG (UBS) could be the precursor to lawsuits against the bank.
The Swiss Financial Market Supervisory Authority must turn over redacted copies of its findings and court filings to three UBS account holders, according to the ruling, Bloomberg reported.
The ruling is the latest development in an effort by global authorities to crack down on people who use secret bank accounts to evade taxes. A suit by the U.S. Justice Department against UBS has been a key part of that initiative. The UBS case was settled in August; as part of it, the Internal Revenue Service will get information on 4,450 accounts that held as much as $18 billion at one time.
In the ruling Wednesday, Judge Francesco Brentani in Bern, said Finma must give the documents to three UBS account holders, identified only as W, H and K, Bloomberg reported. The judge is reviewing complaints that the regulator shouldn’t have ordered account details to be sent to the Internal Revenue Service in February.
Finma ordered UBS to provide information on some U.S. account holders as part of a February settlement between the DOJ and UBS.
Asher Rubinstein, a partner at law firm Rubinstein & Rubinstein, LLP, said information in the documents theoretically could be used in lawsuits by UBS customers against the bank.
The bank is “going to be heading for quite a number of suits by Americans” he adds. Such suits could charge that the bank “aided and abetted customers’ tax fraud” by encouraging them to set up secret accounts and hide the income from them from U.S. tax authorities.
UBS declined to comment on the ruling.