UBS must wait until December in fight over US$5.3 bil fine

UBS must wait until December in fight over US$5.3 bil fine
-A +A

(Sept 27): UBS Group AG must wait until the end of the year for the outcome of its bid to topple a record 4.5 billion-euro (US$5.3 billion) French penalty, after one of the judges assessing the tax case fell seriously ill.

The Paris court of appeals said the judgment — originally scheduled for Monday — will now be handed down on Dec 13. UBS is challenging a 2019 conviction for allegedly helping clients to launder funds through numbered accounts and trusts that should have been declared to French tax officials.

UBS is on track to at least win a reduction after prosecutors conceded that recent guidance from France’s top court forced them to seek a lower fine, bringing the total penalty and damages sought to 3 billion euros. The Zurich-based lender has only set aside 450 million euros in provisions.

During the appeal hearings in March, French prosecutors described wrongdoing of “an exceptional magnitude.” A UBS lawyer said the bank’s behaviour was “no different, if not sounder” than other lenders based in Switzerland. 

Presiding Judge Francois Reygrobellet voiced his exasperation at times, in particular after UBS invoked yet again Switzerland’s banking secrecy in court.

Six ex-UBS bankers are also awaiting the appellate ruling. The most high-profile among them, former head of UBS’s wealth-management unit Raoul Weil, is also the only one who was acquitted in 2019 during the first trial. The five others got suspended sentences and fines as high as 300,000 euros.