Belgium has called on a judge to investigate allegations of UBS fraud and money laundering at the highest levels of banking.
UBS Approaching Belgian Customers Directly?
UBS has been suspected of directly approaching its customers without going through its Belgian subsidiary. The bank is supposedly encouraging the use of tax-evading transactions.
A spokesperson at UBS has admitted acknowledgement of the inquiry but nothing more was disclosed.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
This is hardly unexpected, given Swiss banking laws and the reason that Swiss banks are still the safe havens that they will always be. Landlocked Switzerland won the America’s Cup, and no one raised an eyebrow when it came to its nautical knowledge.
“We take note of various articles in the press, which indicate that an official investigation will be conducted,” said the UBS spokesman. “UBS will continue to defend itself against any unfounded allegations.”
UBS not without Its priors
Similar investigations were made into the bank’s activities by authorities in France not long before this judicial inquiry. Belgian authorities have reportedly received “excellent cooperation” so far from the French authorities.
In July 2014, the bank posted bail of over $1 billion after being accused of similar counts of money laundering and tax evasion. In a case that is still in motion, UBS was accused of assisting its French clients in tax avoidance for almost a decade since 2004.
In 2014, Michael Bruehwiler, the Belgian chief executive of UBS was also charged with money laundering among other crimes following in-depth investigations.
Across the pond, the current investigation follows a Department of Justice investigation cum prosecution of the company back in 2009. UBS ultimately agreed to a settlement of $780 million, surprisingly admitting to aiding in the avoidance of US taxes.
Strict Swiss Banking Privacy Laws
Due to Switzerland’s strict banking privacy laws, funds and assets held in Switzerland are a popular target for tax authorities. This has increased in recent years, resulting in a rise of deals between American authorities and Swiss based banks.
Regulating officials investigating bank fraud, largely, turn to the Cayman Islands in their search. It’s one thing to focus on a Swiss bank in East Coast February. It’s a whole different animal to focus on a known money laundering bank in the Caribbean. Swiss banks largely avoid prosecution and investigation because investigators don’t want to go to Zurich.
Even in summer, it’s cold.