Tax Fraud and Risk Sale: UBS to Pay 3.7 Billion Euros to Tax Authorities

economy

Friday, November 9, 2018

For UBS, the week is agitated: while the Parisian prosecution demands an unprecedented sentence, the US government has initiated another lawsuit against the Swiss bank after a dispute. Once again, billions are threatening.

During the trial for tax fraud against the Swiss bank UBS in France, the prosecutor's office asked for a record fine of 3.7 billion euros. Tax evasion was "only a theft to the detriment of the community," prosecutor Eric Russo told the Paris Criminal Court. The penalty for the banks must be up to the damage suffered by the company.

According to the indictment, the bank allegedly instigated French customers to smuggle more than $ 10 billion. UBS rejects the illegal trade allegation. In response to requests from the prosecutor's office, the bank criticized an "irrational calculation". There is also "no evidence" for the allegations.

The case against the bank is one of the largest tax fraud cases in France. On Monday, advocacy for the defense begins.

US government sues UBS

At the same time, US authorities have announced that they have filed a lawsuit against UBS for the sale of so-called mortgage-backed securities. The financial company had misled investors about the issue of risk. Controversial securities transactions in the years 2006 and 2007 have always been tainted with controversy. Even though UBS itself has not made any larger loans to the then overheated US real estate market. However, like many other banks, it has bundled and resold such mortgages.

The US authorities believe that there is evidence that the institutions used these securitizations to make a significant contribution to the global financial crisis, as it included many loans at risk of default. As the market collapsed in 2008 and 2009, complex stocks became virtually worthless and investors suffered "catastrophic losses," said the New York attorney. UBS rejected the allegations in a statement.

According to one insider, the US government has taken legal action, with UBS rejecting an agreement for a fine of nearly $ 2 billion. The bank did not want to comment further. She had expected the prosecution and had already announced that she would resist it. With many other banks, the United States Department of Justice has already agreed to payments in the amount of one billion dollars. These include Deutsche Bank, Credit Suisse, US institutions Citigroup, JPMorgan and UK banks Royal Bank of Scotland and HSBC.

Source: n-tv.de