UBS Says Plans To Shut US Offshore Arm Continues Amid Probe
Wednesday November 19th, 2008 / 18h54
ZURICH -(Dow Jones)- UBS AG (UBS) is continuing with its planned closure of a U.S. business being probed by federal authorities over alleged tax evasion, amid the indictment of a high-ranking bank executive, according to presentation slides made public Wednesday. The Zurich-based bank "is continuing with plans" to shut private banking services serving U.S. clients from Switzerland, which the U.S. Department of Justice is investigating, UBS bank executive Mark Branson said in a presentation to investors. U.S. authorities are believed to be demanding Switzerland force UBS to hand over confidential client data. "UBS is not a party in these proceedings but has been and will continue to fully support and assist the process," Branson told investors according to the slides. Because Swiss law doesn't treat tax evasion as harshly as U.S. law does and provides tight secrecy on client data, UBS can only be forced to relinquish confidential data as a result of negotiations between the two governments. The U.S. probe has already hit UBS' private banking head Raoul Weil, who stepped down from his duties last week as he prepares to fight his indictment by a U.S. federal court in connection with the tax evasion allegations. Through his attorney, Weil has denied either engaging in or having knowledge of illegal activity in the unit. Wednesday, Morgan Stanley analyst Huw van Steenis estimated UBS' fines and settlements related to the probe will reach 1 billion Swiss francs ($833.3 million). UBS declined to comment on van Steenis' estimate. The probe comes as UBS tries to leave more than $46 billion in write-downs, mainly on mortgage-related securities, behind it. The write-downs and four consecutive quarters of heavy losses have hit UBS' flagship private bank, with clients withdrawing money. UBS said recently outflows have slowed since the Swiss government stepped in with financial aid, and has promised investors an update on the closely-watched measure next Thursday. Shareholders will then convene to debate executive compensation and vote on the government shore-up. Company Web site: www.ubs.com -By Katharina Bart, Dow Jones Newswires; 0041 43 443 8043; katharina.bart@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=UTizz9U0BZpMDUM9Mn6yxQ%3D%3D. You can use this link on the day this article is published and the following day.
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