From the Financial Times this morning;
UBShas agreed to pay $780m (£548m) in fines and turn over some customer names to the US government as part of a landmark settlement in which the Swiss bank admitted it helped thousands of clients evade taxes.
The deferred prosecution agreement settles a long-running criminal investigation by the US Department of Justice into whether UBS helped wealthy US clients hide bank accounts from the Internal Revenue Service.
Here is the full article from FT UBS Settles Tax Probe So this is some good news. Between the fine and what we get from the 250 names UBS is handing over could keep the bailout and stimulus going for a few hours AT LEAST!
We have had a lot of fun with UBS and the Swiss the last year or so. Full disclosure is I worked at one of them and well........now I'm a world famous blogger and let's leave it at that! Anyway, when this first came to light last June we wrote a couple of things on it that you may find interesting and amusing. This piece was written June 20, 2008 Swiss Banking Having It's Joe Valachi Moment.
Here's a piece that tackles the general decline of all that is or was Swiss titled "What the Heck Happened to Switzerland?" back on June 1, 2008
There has been a lot of news lately about UBS private bankers getting nabbed by the U.S. Justice Department for aiding and abetting wealthy U.S. individuals to evade U.S. taxes. Not only are the UBS private bankers getting nailed, their clients are too! This week the big news was Igor Olenicoff pleaded guilty to using several offshore banks, mostly in Switzerland and Liechtenstein, to evade taxes on nearly $200 million in assets. Former UBS banker Bradley Birkenfeld was indicted April 10 for "helping" Olenicoff. I have a number of questions, leading up to a major question.
Question #1 - Aren't very wealthy people SUPPOSED to do this? I grew up always hearing about Swiss bank accounts. I thought having one was a true sign of success! I thought the whole reason Liechtenstein existed was to hide rich people's money.....seriously!
Question #2 - Didn't the Swiss USED to be GOOD at this kind of stuff? I thought the whole point of having a Swiss private banker and a Swiss bank was that they were great at hiding your money! Every movie I've ever seen where somebody bad has to go and get their real money, they'd show up at some discreet Swiss bank and get it. Hell, back in the day, the Swiss were able to do the banking of Hitler's Germany, and nobody could touch them. Seriously, when Hitler needed to buy iron ore from Sweden, or something like that, they would do all the banking through the Swiss! You would think that would have warranted a bombing run or two....but it never did because they had everybody else's money too! When did the Swiss start sucking at this? Also, when it comes to the strategy and execution regarding the hiding of an American's money, why was the banker doing it a U.S. citizen? Didn't that kind of defeat the purpose? It looks like it did...no?
Question #3 - With regard to banking in general, weren't the Swiss supposed to be good at this too? When its all said and done, UBS (the top Swiss bank) may come out of this current banking meltdown as the dumbest of the bunch. They actually may top the dopey German Landbanks, who were never regarded as the sharpest tools in the shed to begin with. UBS has given itself more self-inflicted wounds than anyone. Even more than Citi! They PURPOSELY held on to billions of "AAA" CDO's and levered them up umpteen times in off-balance sheet transactions (SIVs). They also set up Dillon Read and gave it a mandate to make as much bonus money as humanly possible for it's traders while putting the whole bank at major risk.... which they succeeded in doing handsomely! You really had to try hard to run UBS into the ground and I'm afraid the Swiss have done just that. The question here I guess is, were they ever really good at banking or is it just another myth destroyed? I'm afraid I'm going to go with the latter on this.
Question #4 - Besides banking and chocolate, the other thing the Swiss were supposed to be really good at is skiing. I've done a little research here and it's shocking. Do you know the last time the Swiss won the world championships of Alpine Skiing? 1989! When I was a kid they ALWAYS won. They came in first place EVERY TIME in the 1980's! The best they've done since is second in 2001, and other than that they have been pretty dismal. I have no idea why this is. Except for the freakishly good Roger Federer, are they really good at any other sport? They grow up in the mountains, shouldn't skiing be to them what basketball is to us? I don't know what's happened with the skiing but it seems to have coincided with the crumbling banking myth.
Question #5 - Chocolate? I've had better and I'll leave it at that.
So the big question here is, "Switzerland, what the heck happened to you?" Is there hope for this country or were they just a pretender all along?