Belgium Tax, Indonesia Islamic Banking, BofA: Compliance

Marcel Bruehwiler, chief executive officer of UBS AG (UBSN)’s Belgium unit, was charged in Brussels as part of a probe into a multibillion-euro tax fraud, accelerating the latest tax-evasion inquiry facing the Swiss bank.

Bruehwiler was charged with criminal organization, money laundering, illegal practice of the profession of financial intermediary and serious organized fiscal fraud, Brussels prosecutors said in a statement June 19. They said Bruehwiler, who was released after several hours of questioning, denied the charges.

“We conduct our business in full compliance with applicable law and regulations,” Yves Kaufmann, a spokesman for UBS, said in a phone interview June 19 before the decision to charge Bruehwiler. “UBS does not tolerate any activities intended to help its clients circumvent their tax obligations. We fully collaborate with the Belgian authorities,” he said.

Kaufmann declined to comment further on June 20.

UBS Belgium’s office in Brussels couldn’t provide contact details for Bruehwiler’s representatives or lawyer.

Compliance Policy

OJK to Revise Indonesia Islamic Bank Reserve Requirement Rule

Indonesia’s Financial Services Authority, known as OJK, will revise a rule this year to comply with an Islamic Financial Services Board standard released in December, Edy Setiadi, OJK Islamic banking director, told reporters in Jakarta June 20.

The IFSB sets international standards and conducts research to promote the stability of the Islamic financial services industry, according to a statement on its website.

OJK will add two risk factors, relating to profit-sharing and investment, in assessing capital adequacy for Islamic banks starting in July.

The regulator expects Islamic saving deposits to rise 7.8 percent on fund transfers.

Compliance Action

BNP Said Close to $9 Billion Accord in U.S. Sanctions Case

BNP Paribas SA (BNP) is close to an agreement to plead guilty and pay $8 billion to $9 billion to settle allegations it violated U.S. sanctions, according to a person familiar with the negotiations.

The French bank intentionally hid transactions amounting to about $30 billion that violated U.S. sanctions against countries including Iran and Sudan, said the person, who asked not to be identified because the discussions are confidential. Paris-based BNP Paribas will probably plead guilty in early July to a criminal charge of conspiring to violate the International Emergency Economic Powers Act, the person said.

Terms of a settlement aren’t final, although the two sides have reached a broad agreement in principle, said the person. Leslie Caldwell, head of the Justice Department’s criminal division, and bank officials spoke on June 20 about the potential resolution, the person said.

Cesaltine Gregorio, a BNP Paribas spokeswoman in New York, declined to comment. Brian Fallon, a Justice Department spokesman, didn’t immediately return an e-mail message seeking comment after normal business hours.

The Wall Street Journal reported the broad settlement terms earlier. BNP Paribas would be temporarily banned from handling transactions in U.S. dollars, probably for a matter of months, the newspaper said.

Courts

BofA Must Face U.S. Suits Claiming Mortgage-Securities Fraud

Bank of America Corp. failed to win dismissal of two government lawsuits in which it’s accused of misleading investors about the quality of loans tied to $850 million in residential mortgage-backed securities.

U.S. District Judge Max O. Cogburn Jr. in Charlotte, North Carolina, ruled June 19 that the U.S. Securities and Exchange Commission properly laid out claims that Bank of America lied to investors about the projected health of the mortgages.

Cogburn also gave the U.S. Justice Department 30 days to revise a parallel suit over the same securities after finding the government hadn’t properly stated its case that bank documents omitted key facts and included false statements. The bank argued that the suit should be dismissed.

Lawrence Grayson, a spokesman for the Charlotte-based bank, declined to comment on the litigation.

The cases are part of a U.S. effort to punish companies for actions it says helped trigger the financial crisis. Bank of America alone has spent more than $50 billion to resolve claims related to shoddy mortgages, most tied to its 2008 purchase of Countrywide Financial Corp., once the biggest U.S. mortgage lender.

The Justice Department case is U.S. v. Bank of America Corp. (BAC), 13-cv-00446, and the SEC case is Securities and Exchange Commission v. Bank of America NA, 13-cv-00447, U.S. District Court, Western District of North Carolina (Charlotte).

Interviews/Commentary

Bats Is ‘More Aligned’ With Investors, Bill O’Brien Says

William “Bill” O’Brien, the president of Bats Global Markets Inc., talked about the role of high-frequency trading and dark pools and how they fit into the purpose of financial markets. He spoke with Erik Schatzker on Bloomberg Television’s “Market Makers.”

For the video, click here.

McDowell Sees Need for ‘Pricing Freedom’ in Web Traffic

Robert McDowell, a former Republican commissioner at the U.S. Federal Communications Commission, talked about Internet-traffic rules. McDowell spoke with Adam Johnson and Scarlet Fu on Bloomberg Television’s “Surveillance.”

For the video, click here.

To contact the reporter on this story: Carla Main in New York at cmain2@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Stephen Farr

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.