UBS Calls French Allegations `Unfounded' as Tax Probe Ends

  • Investigating judges ended inquiry into UBS on Feb. 19
  • UBS had to post a French bail of 1.1 billion euros in 2014

UBS Group AG said a five-year French probe into allegations it helped clients evade taxes has been completed, bringing the bank a step closer to facing a possible trial and fine. 

“We look forward to the opportunity to respond to unfounded allegations,” the Zurich-based bank said in an e-mailed statement on Monday. Investigating judges ended their inquiry into UBS on Feb. 19, according to a spokesman at the French national financial prosecutor. Once the prosecutor’s office files its remarks over the next three months, investigating judges will decide whether or not to send the lender to trial.

Switzerland has tried to shake off its reputation as the world’s largest tax haven by cooperating with other governments trying to recoup undeclared assets and watering down banking secrecy laws. In 2009, UBS paid $780 million to the U.S. to avoid prosecution, admitting it helped thousands of Americans evade taxes and agreeing to turn over information on their accounts.

Settlement talks between UBS and the French authorities broke down in July 2014 because the lender balked at pleading guilty, people familiar with the events said at the time. UBS, which had to post a bail of 1.1 billion euros ($1.2 billion) later that year has called the process “highly politicized” and denounced French actions as “unprecedented and unwarranted.”

UBS shares have lost about 22 percent this year, while Credit Suisse Group AG is down 38 percent.

Credit Suisse is under investigation in Italy on suspicion of money laundering and tax evasion over billions of euros of insurance policies, people familiar with the matter said last week. Starting in 2005, the Swiss bank allegedly helped about 4,000 Italian clients protect as much as 8 billion euros of funds that were earned illicitly, they said.

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