UBS to hand over private client details to US government

Banking giant UBS has done a deal with the US Department of Justice whereby it will escape prosecution in exchange for handing over the details of an undisclosed number of its wealthy American clients who it believes have committed tax fraud.

The DoJ had previously accused the Switzerland-based bank of conspiring to defraud the US by helping 17,000 Americans hide accounts from the Internal Revenue Service.

Charges will be dropped in 18 months time as long as, and in addition to handing over names, UBS pays $780 million in fees, completes the exit of its US cross-border business out of non-SEC registered entities and implements and maintains an effective programme of internal controls.

"UBS sincerely regrets the compliance failures," stated Peter Kurer (pictured), chairman of UBS. "Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused confidentiality protections."

In addition, the Swiss Financial Market Supervisory Authority published the results of an investigation by the Swiss Federal Banking Commission which concluded that UBS violated the requirements for proper business conduct. It has consequently barred UBS from providing services to US-resident private clients out of non-SEC registered entities.

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