Financial services giant can't bank on Swiss secrecy laws for protection
Swiss banking secrecy laws have been the stuff of legend. Under the Swiss Banking Act of 1934, the privacy of deposits has been sacrosanct. No one was permitted to divulge any information about who the depositors were. That protective shield has been made the basis of books, movies, spy thrillers, and was even a key feature of Dan Brown's "The DaVinci Code."
settlement with the U.S. government. Under the deferred prosecution agreement, not only will UBS pay a $780 million fine, but the Swiss bank has also agreed to immediately provide the government with the identities of -- and account information for -- about 250 to 350 United States customers of UBS' cross-border business which it halted last July for U.S. citizens.
The problems might not be over for UBS. Because banks in Switzerland are prohibited from revealing any information to authorities about their clients, except in cases involving recognized criminal investigations, the Swiss Financial Markets Supervisory Authority (FINMA) said "Such charges could have had drastic consequences for UBS and its liquidity situation and ultimately put its existence at risk," as well as for "the stability of the Swiss financial system."
FINMA reprimanded UBS and banned it from future cross-border business with U.S. customers. UBS recorded a $17 billion loss in 2008 and had to get bailout assistance from the Swiss government as a result of the financial crisis and credit squeeze.
It's not secret that UBS was caught between the hammer of the U.S. government criminal prosecution and the anvil of Swiss bank secrecy laws. Although the Swiss government maintains its acclaimed secrecy veil remains in place, UBS has let the cat out of the bag that piercing the shield is possible, though expensive.
I have no financial interests in any of the stocks mentioned in this article.
The problems might not be over for UBS. Because banks in Switzerland are prohibited from revealing any information to authorities about their clients, except in cases involving recognized criminal investigations, the Swiss Financial Markets Supervisory Authority (FINMA) said "Such charges could have had drastic consequences for UBS and its liquidity situation and ultimately put its existence at risk," as well as for "the stability of the Swiss financial system."
FINMA reprimanded UBS and banned it from future cross-border business with U.S. customers. UBS recorded a $17 billion loss in 2008 and had to get bailout assistance from the Swiss government as a result of the financial crisis and credit squeeze.
It's not secret that UBS was caught between the hammer of the U.S. government criminal prosecution and the anvil of Swiss bank secrecy laws. Although the Swiss government maintains its acclaimed secrecy veil remains in place, UBS has let the cat out of the bag that piercing the shield is possible, though expensive.
I have no financial interests in any of the stocks mentioned in this article.
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