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Old 29.06.2008, 13:37
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UBS could lose banking licence in USA

According to the Guardian in the UK:

http://www.guardian.co.uk/business/2...29/ubs.banking

Tax scandal leaves Swiss giant reeling

UBS could lose its licence in America after an official confessed to illicit tactics that helped clients avoid the Revenue. Nick Mathiason reports

..

After two years of further investigations, Olenicoff's evidence resulted this month in a dramatic development. UBS, the most powerful bank in Switzerland, is now on the edge of a steep cliff. Ten days ago, Bradley Birkenfeld, who between 2001 and 2006 was a senior UBS banker, signed a US court statement detailing how he smuggled diamonds in toothpaste tubes, deliberately destroyed offshore bank records on behalf of clients and helped Olenicoff evade taxes of $200m on offshore assets worth $7.26bn.

In an explosive seven-page deposition, Birkenfeld claims he was encouraged to win clients at UBS-sponsored tennis tournaments and major art events. UBS bankers, he said, assisted wealthy Americans to conceal ownership of their assets by creating 'sham' offshore trusts. Misleading and false documentation was routinely prepared to facilitate this, and the motivation, he concluded, was to ensure that UBS continued to manage a staggering $20bn of assets owned by wealthy US individuals, which generated the bank $200m in fees each year.

..

For UBS, the scandal could not come at a worse time. No other European bank has suffered as much from the sub-prime meltdown as the Zurich-based giant. It has been forced to write down a staggering $38bn in assets. Its losses have led to the departure of the chief executive, chairman Marcel Ospel and other managers and have prompted it to seek emergency investment from Singapore and the Middle East. Now predators led by HSBC and Credit Suisse are said to be ready to pounce. Last Wednesday, UBS appointed Lazards to consider its options. 'I envisage it will be broken up,' says the London UBS source. 'But nothing will be done without the Swiss government.'

Bloody hell, this just gets worse and worse. Just how much dodgy dealing was going on behind the oh so pristine facade?
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  #2  
Old 29.06.2008, 14:24
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Re: UBS could lose banking licence in USA

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Bloody hell, this just gets worse and worse. Just how much dodgy dealing was going on behind the oh so pristine facade?
I love the way you put that.

Truly amazing even mind boggling that such a big firm can make such a mess.
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Old 29.06.2008, 14:25
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Re: UBS could lose banking licence in USA

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Bloody hell, this just gets worse and worse. Just how much dodgy dealing was going on behind the oh so pristine facade?

below 20chf this week I reckon.
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Old 29.06.2008, 14:27
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Re: UBS could lose banking licence in USA

SwissInfo article

http://www.swissinfo.ch/eng/news/soc...rss=true&ty=st
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Old 29.06.2008, 14:30
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Re: UBS could lose banking licence in USA

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I love the way you put that.

Truly amazing even mind boggling that such a big firm can make such a mess.
Actually, the bigger they are the harder they fall...... When something is so big and sprawling it's hard for even determined management to keep a lid on everything that's happening in the corners of their empire. Even if they were trying to stop this sort of stuff.


Hmmm, time to reduce my UBS balance to 30k.
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Old 29.06.2008, 14:34
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Re: UBS could lose banking licence in USA

I don't know the truth but it's only logical that Mr. Birkenfeld blames the bank to shift as much guilt as possible away from him...

From what I can tell, events haven't unfolded so far to state that a loss of the banking license is a considerable possibility?
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Old 29.06.2008, 14:35
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Re: UBS could lose banking licence in USA

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Actually, the bigger they are the harder they fall...... When something is so big and sprawling it's hard for even determined management to keep a lid on everything that's happening in the corners of their empire. Even if they were trying to stop this sort of stuff.


Hmmm, time to reduce my UBS balance to 30k.
& Gav ... you will not be the only one, I hate to think what the capital flight from normal depositors havs been over the last 6 months, bt am pretty sure its significant.

Off topic : but I have opened an online account with Kopthing & is very easy to work with.
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Old 29.06.2008, 15:59
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Re: UBS could lose banking licence in USA

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<snip>
I hate to think what the capital flight from normal depositors havs been over the last 6 months, bt am pretty sure its significant.
<snip>
There was a small piece in 20Minuten on Thursday (26.06.2008) which stated the capital drain was CHF 4.4Bn, which was quoted as being a loss of "relatively speaking very few customers".

I don't own any UBS stock or derivs currently, but in amongst all this critiscising of UBS I think the smart investor starts to ask themselves is UBS making money, if not will it again be able to make money and is it going to div anyway in the time it doesn't ( i believe Fortis announced this week that they are passing there div which is shocking). If so how much, and when.

We are well into probably the deepest run on banks there has been and the fact that so many people want to take an outright view (good/bad) as opposed to a value view (cheap/expensive) is IMHO potentially a mistake. If ~CHF20 is the wrong price for UBS then someone suggest the right price and justify it.
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Last edited by Shove; 30.06.2008 at 13:51.
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Old 29.06.2008, 17:15
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Re: UBS could lose banking licence in USA

Realistically, I can't see the US pulling their license. There are just too many people employed by UBS in the US for them to take such a drastic move. There will be big fines, but they will remain in business (unless they go bankrupt, of course...).
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Old 29.06.2008, 20:22
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Re: UBS could lose banking licence in USA

I don't think the number employed by a company makes a difference. If they have done something which merrits going out of business or being broken up it will happen. It happened to Accenture / Anderson with Enron.
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Old 29.06.2008, 20:29
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Re: UBS could lose banking licence in USA

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I don't think the number employed by a company makes a difference. If they have done something which merrits going out of business or being broken up it will happen. It happened to Accenture / Anderson with Enron.
Some say it happened to McDonnell-Douglas as well.

Indeed, UBS could end up merging their US operations with another US company.

Last edited by gregv; 29.06.2008 at 20:31. Reason: Complete sentences are much more understandable...
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Old 29.06.2008, 22:42
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Re: UBS could lose banking licence in USA

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Hmmm, time to reduce my UBS balance to 30k.
Even 30k may not be safe. The insurance pool is probably not big enough to compensate a large number of depositors.
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Old 29.06.2008, 22:55
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Re: UBS could lose banking licence in USA

Diamonds in toothpaste tubes. How sophisticated.

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Realistically, I can't see the US pulling their license. There are just too many people employed by UBS in the US for them to take such a drastic move. There will be big fines, but they will remain in business (unless they go bankrupt, of course...).
I think they would rather have them to open their books, than pull their license.
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Old 30.06.2008, 00:29
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Re: UBS could lose banking licence in USA

Yes let everyone open their books, see where that will lead us.
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Old 30.06.2008, 01:29
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Re: UBS could lose banking licence in USA

i think it has to nothing to do with ubs per se..its to do with swiss signing the energy contract with the iran.. so now USofA started to dig into swiss..
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Old 30.06.2008, 11:51
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Re: UBS could lose banking licence in USA

Are pension funds deposited at UBS in Freizugiker accounts or dritte zaule accounts protected?
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Old 30.06.2008, 12:04
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Re: UBS could lose banking licence in USA

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Are pension funds deposited at UBS in Freizugiker accounts or dritte zaule accounts protected?
So far as I know Freizugiker accounts are not specifically protected. I believe pension accounts fall under the 30K CHF rule (maybe somebody knows better); that is the rule that every depositor is protected up to 30K CHF - this is not 30K per account but per depositor.

Marton
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Old 30.06.2008, 12:44
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Re: UBS could lose banking licence in USA

Does anyone know if there is an independent banking agency (I guess I mean a government agency) that you can call to ask about things like this? I've had my accounts at UBS for years, and have my pension money parked there temporarilty. If they are really unstable I will move everything. I have to admit I haven't been paying so much attention to this in the news since I've been preoccupied with family illnesses. I assumed it was a US problem and would not have an impact on the Swiss bank. They just seemed so 'safe'.
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Old 30.06.2008, 12:50
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Re: UBS could lose banking licence in USA

Yes that is the frightening thought so 'safe' and so 'professional', so 'intelligent' and in reality one has to wonder at all of this in a new light.
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Old 30.06.2008, 13:00
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Re: UBS could lose banking licence in USA

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There was a small piece in 20Minuten on Thursday (26.06.2008) which stated the capital drain was CHF 44Bn, which was quoted as being a loss of "relatively speaking very few customers".



We are well into probably the deepest run on banks there has been and the fact that so many people want to take an outright view (good/bad) as opposed to a value view (cheap/expensive) is IMHO potentially a mistake. If ~CHF20 is the wrong price for UBS then someone suggest the right price and justify it.
44Bn chf ? ... I think any bank in the world that is seeing that sort of money drain from depositors will be on tenterhooks .... Northern Rock anyone. Just reading the sentiments on this thread & others, people are righteously pi**ed off with UBS.

Well shares have dived 0.80 chf (3.6%) in this mornings trading, so time will tell.
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