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UBS in battle with U.S. over its aid to tax-evading wealthy Americans

19 July, 2009

U.S. vs. UBS: A Fight Over Secret Swiss Bank Accounts

By Helena Bachmann / Geneva Wednesday, Jul. 15, 2009

…the U.S. Department of Justice is accusing Swiss banking giant UBS of helping wealthy Americans hide billions of dollars from the tax man and insisting that the bank reveal their identities. On the other, the Swiss government is threatening to step in to protect the country’s famous secrecy laws. The two have until Aug. 3 to come up with an agreement — or continue the fight in court.

UBS has been under investigation by the Department of Justice since last summer for allegedly helping wealthy Americans hide $200 billion in undisclosed offshore accounts to evade taxes. To absolve itself of criminal charges, the bank, one of the world’s largest wealth managers, agreed to pay a $780 million penalty and release the names of 250 clients whom the Internal Revenue Service suspected of evading taxes.

But that wasn’t enough to end the bank’s troubles. In February, the Department of Justice filed a civil lawsuit against UBS seeking the identities of 52,000 more Americans suspected of stashing a total of $15 billion at the bank. This time, the Swiss were having none of it.    (bold emphasis mine)   here

Here’s another little bit about UBS: In 2008, the SEC filed suit in NY against UBS for misleading customers about auction rate securities.  Despite the fact that

UBS’s senior management was aware of undisclosd risk factors associated with its ARS program…

As a direct result

…over forty thousand UBS customer accounts holding more than $3 5 billion in auction rate securities had their investments rendered virtuaIly illiquid overnight and, because of the illiquidity, many customers incurred mark to market losses on the par value of their ARS investments held at UBS. Customers who did sell their securities in the secondary market had to do so at a loss.   here (pdf format)

A global economy is not set up for the benefit of any citizen in any country who is not directly involved/employed/managing the bank itself.  We have allowed the banks to gain far too much power to influence our economies, our politics, and every aspect of our earning and spending of money.  We must limit them as well as limit our government.  Together they are dangerous to the citizenry of this country.

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