Nov. 26 (Bloomberg) -- Pictet & Cie., Switzerland’s biggest closely held bank, said its wealth-management business with American clients is the subject of a “general inquiry” by the U.S. Department of Justice.
Pictet plans to cooperate “as fully as possible” with the U.S. authorities, the Geneva-based private bank said in a statement yesterday. “Pictet has made it a priority to ensure that its business with U.S. clients complies with all the relevant laws and regulations governing its conduct.”
Pictet reported the DoJ inquiry after Der Sonntag newspaper yesterday said the wealth manager and Bank Frey have been added to a probe of 11 other Swiss financial firms. The stakes for the Swiss banks under investigation, including Credit Suisse Group AG and Julius Baer Group Ltd., were raised after the DoJ indicted Wegelin & Co. on Feb. 2 for allegedly helping American customers hide money from the Internal Revenue Service.
Pictet, which manages 281 billion Swiss francs ($302 billion) for clients worldwide, said in May it wasn’t under investigation by the DoJ after an indictment of three Americans in Phoenix last year showed the bank was used to set up secret accounts not reported to the IRS. The Swiss Financial Market Supervisory Authority, known as Finma, has communicated with Pictet and Bank Frey regarding data delivery to the U.S., according to Der Sonntag.
Pictet declined to comment further today. Regulator Finma and Zurich-based Bank Frey weren’t immediately available for comment when called by Bloomberg News.
Switzerland began talks with the U.S. in mid-2011 to resolve the DoJ probe.
Credit Suisse, the second-biggest Swiss bank, set aside 295 million francs for U.S. tax matters in the third quarter of last year. Julius Baer spent 20 million francs in the first eight months of this year on U.S. legal matters and has said the total cost of the investigation isn’t “reliably assessable.”
HSBC Holdings Plc’s Swiss unit may pay “significant” fines and penalties related to the probe, the Geneva-based bank said in its 2011 annual report published in May. Credit Suisse, Baer and HSBC have handed over employee details to the U.S. authorities after the Swiss federal government suggested it might help resolve the dispute.
U.S. legal pressure on the Swiss financial center is “intolerable” as it transgresses the Alpine nation’s sovereignty, Nicolas Pictet, a managing partner at the Geneva wealth manager, said in January in his capacity as president of the Swiss Private Bankers Association.
UBS AG, Switzerland’s largest bank, avoided prosecution in February 2009 by paying $780 million, admitting it fostered tax evasion and turning over data on secret accounts to the IRS.
To contact the reporter on this story: Giles Broom in Geneva at email@example.com
To contact the editor responsible for this story: Frank Connelly at firstname.lastname@example.org