UBS Whistleblower Criticises Banking’s ‘Code Of Silence’ by Antoine Kowalski in Paris, swissinfo.ch
Gibaud started working at UBS France when it opened there in 1999 and was head of communications until 2012, with particular responsibility for organising bank events in France. Upon learning of the alleged illegal nature of the bank’s activities in France, she was instrumental in revealing the scandal of tax evasion and fraud.
Earlier this year she published a book in French, “The woman who knew far too much”.
For its part, UBS AG (NYSE:UBS) said in a statement: “The base for any calculations in this matter are completely artificial, speculative and not based on facts. We cannot control the irresponsible disclosure of confidential documents or their selective interpretation. This matter is currently still in the stage of a formal investigation and we will continue to defend ourselves strongly.”
Marathon Partners Equity Management, the equity long/short hedge fund founded in 1997, added 8.03% in the second quarter of 2021. Q2 2021 hedge fund letters, conferences and more According to a copy of the hedge fund's second-quarter investor update, which ValueWalk has been able to review, the firm returned 3.24% net in April, 0.12% in Read More
swissinfo.ch: What do you think about the recent developments in the UBS France affair?
Stéphanie Gibaud: UBS France, as well as the parent company in Zurich, is – thanks notably to my work – under investigation. This has taken a long time: seven years from summer 2007 to summer 2014. During the period 1999 to 2007 I was unaware that the information in my possession was high risk. I filed a complaint against UBS AG (NYSE:UBS) in 2009. I was contacted by the financial police at the beginning of 2011. The journalist Antoine Peillon published his book “Ces 600 milliards qui manquent à la France” (“Those 600 billion that France is missing”) at the beginning of 2012, which resulted in a probe and financial investigations.
My information helped the justice authorities make progress. If I hadn’t spoken out, I too would certainly have been indicted and the bank wouldn’t have cared. Keeping silent is akin to being an accessory.
swissinfo.ch: You started at UBS in 1999. You tell of a brutal change in 2007, the year when the UBS case flared up in the US. What did this involve?
S.G.: I was working in marketing and communications, essentially event-driven work for the clients, to tout for [clients], in collaboration with my colleagues working on Swiss business. Overnight a “Chinese wall” appeared after the American scandal broke: a ban on going out, on meeting partner companies, the firing of my assistant and intern. The explanation? “There’s a lot less work”…
swissinfo.ch: You say that keeping silent is akin to being an accessory.But, despite everything, weren’t you an accessory to this system for eight years?
S.G.: I was in a risky position for eight years without my knowledge. I didn’t know that the information in my possession was sensitive. I turned to my superiors in the bank. They told me that I was tired, that I should take some holiday, that I didn’t have all the facts.
swissinfo.ch: From 2007 to 2012, you complained that you had been harassed by UBS. Why would the bank harass you?
S.G.: They harassed me in order to break me. There were several stages. After [US whistleblower] Bradley Birkenfield’s revelations, UBS decided to get rid of a number of “awkward” employees. In Switzerland it stopped there. In France the employee is protected by work law. UBS France tried to put me on a social plan, but my firing was refused by the work inspectorate. I had already been there to tell them what I knew.
From the end of 2007 to summer 2009 a new superior kept calling me into his office to denigrate me and criticise my “incompetence”. In June 2008 they announced a raid had taken place in the managing director’s office and asked me to destroy part of my hard disk and the contents of my archive cupboards. I refused and asked questions. I didn’t get any answers and realised I was considered a nuisance.
swissinfo.ch: You say you were asked to delete data on your computer and your paper archives. You say they were deleted. Who could have done this and what was the content of these documents?
S.G: I can confirm that I was asked to, I refused and they deleted them anyway. It wasn’t my assistant. What I do know is that I wrote to the bank twice – to the chairman of the board and the managing director – explaining problems on my hard disk. Following these letters, a group of non-sensitive documents were restored. These documents used for organising events were lists containing the names of French and Swiss clients and their account officers. These files revealed that Swiss account officers were soliciting French clients in France with a view to opening undeclared accounts in Switzerland.
swissinfo.ch: You didn’t find it suspicious that Swiss account officers were turning up at events you organised?
S.G: UBS opened in Paris in 1999 and decided to open in regional capitals in 2001. The number of offices multiplied. For the events – 100 a year – I worked on a daily basis with French account officers as well as those from Switzerland, from Basel, Lausanne, Zurich and mainly Geneva. I never stopped. How do you expect me to suspect that something’s illegal? Until 2007 UBS was above suspicion – it was presented as the most powerful and cleanest bank in the world.
swissinfo.ch: Did UBS lodge a complaint against you or your editor when your book came out?
S.G: UBS France only sued me in January 2010 for defamation. They lost on all four charges. I gave an internal statement when questioned about the comments I had raised on illegal solicitation, organised tax evasion and money laundering. On the basis of this statement, the bank’s case was dismissed in October 2010.
Since the book was published, my lawyer and the editor’s team of lawyers have only ever seen one complaint lodged by UBS – for defamation “against X”, but not against me.
swissinfo.ch: UBS insists that you have made this story up.
S.G: The French authorities took me seriously. Belgium and other European countries, to mention the main ones, asked me to be a witness. Unlike the bank, I have never been prosecuted or indicted – either in France, Belgium, the US or Germany.
swissinfo.ch: You have announced the launch of an international whistleblowers’ platform. How does it work and what’s its mission?
S.G: I’m taking part in the foundation of a whistleblowers’ network called PILA. The aim is to enforce greater transparency by enabling everyone – citizen, wage-earner, journalist – who is faced with serious problems with how a company is run and who is in possession of information of general interest to speak and be listened to, advised and protected.
French investigating magistrates have proposed that UBS pay a fine of €4.88 billion (CHF5.9 billion) in an investigation into whether the Swiss bank helped wealthy French individuals dodge tax, according to a judicial source on October 3.
The proceedings are still at an investigation stage. The proposals were made to an investigating judge who will decide whether there is a case against the bank. According to the source, the magistrates based their calculations on a total of €12.2 billion they claimed was held by UBS on behalf of French individuals. They then assumed that 80% of that sum – some €9.76 billion – was fraudulent money and decided the fine should amount to half of that sum, €4.88 billion, according to the source. The Paris prosecutor’s office declined to comment on the figures provided by the source.
The Zurich-based bank was put under formal investigation by French prosecutors in July after allegations it laundered the proceeds of tax evasion by French citizens. Investigators demanded a €1.1 billion guarantee to cover potential fines. UBS has appealed this payment, saying the demand was “without legal basis”. “We continue to believe that this is a highly politicised process that from the beginning of the investigation has not followed elementary facets of the rule of law,” it said in September. UBS has also said it will go to the French Supreme Court and challenge the judicial process at the European Court of Human Rights.
The French case is one of several legal problems the bank is facing. It hiked its provisions against future litigation to CHF1.98 billion earlier this year but warned this might still not be enough to cover possible fines and charges.
By Antoine Kowalski in Paris, swissinfo.ch
(Translated from French by Isobel Leybold-Johnson and Thomas Stephens)