UBS- Impact of case on US Wealth Management?

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burtonfinancial1's picture
Joined: 2008-09-30

What's the impact this is having for FAs at UBS right now if any?NEWSMAKER-Tough U.S. judge set to preside in UBS tax case
Fri Jul 10, 2009 10:26am EDT

* Judge has ruled against big business before

* Runs tight courtroom and 'suffers no fools'

* 'Put up or shut up' seen as his message to US government

By Tom Brown

MIAMI, July 10 (Reuters) - The judge presiding over a
high-stakes legal showdown between the U.S. government and
Swiss bank UBS AG is seen as a straight-shooter who has not
shied away from taking aim at big corporate interests.

Some see Judge Alan Gold of U.S. District Court for the
Southern District of Florida emerging as an international
mediator as he deals with issues loaded with important foreign
policy and financial ramifications, led by U.S. demands for a
lifting of Switzerland's treasured bank secrecy laws.

But U.S. attorneys and prosecutors who know him say Gold, a
65-year-old native New Yorker, will studiously avoid doing
anything inconsistent with his role as a judge as he handles
his biggest and most publicized case since he came to the
federal bench in Miami nearly 13 years ago.

"He's about as straight-shooter as they come," said Charles
Intriago, a former U.S. federal prosecutor and money laundering
expert, who publishes a website for law enforcement officials
about asset forfeiture.

"He's the perfect judge for this," he added, referring to
the hearing Gold is set to preside over Monday in a suit in
which the Justice Department is seeking to force UBS (UBSN.VX: Quote, Profile, Research, Stock Buzz)
(UBS.N: Quote, Profile, Research, Stock Buzz) to disclose information on 52,000 secret accounts
suspected of being used by wealthy Americans to avoid paying
their taxes.

There is little in Gold's record to indicate how he might
rule in the case, which experts say could set an important
legal precedent since it marks the biggest test ever of Swiss
bank secrecy.

Gold grabbed the media spotlight in a business law case
once before, when he presided over a class-action lawsuit
against Exxon Corp that resulted in a settlement costing more
than $1 billion.

Gold surprised some observers of the closely watched UBS
case on Wednesday by ordering the Justice Department to say
whether it was prepared to seize the U.S. assets of UBS as part
of its battle to get the bank to disclose client information.

ShotInTheDark's picture
Joined: 2008-03-25

A good advisor keeps their clients educated about current news topics.

DodgerDraftpick's picture
Joined: 2006-12-24

Maybe waking up the ones with their heads in the sand that U an Us might not be the best place to be right now

secretknowledge's picture
Joined: 2009-03-28

I think that the case will be settled on Sunday. As part of the settlement UBS will have to sell PaineWebber.

Iocaine's picture
Joined: 2007-06-25

secretknowledge you have been pretty accurate in the past, how confident are you in this prediction?

Lew Ashby's picture
Joined: 2009-01-13

secretknowledge wrote: I think that the case will be settled on Sunday. As part of the settlement UBS will have to sell PaineWebber.

From your mouth to God's ears! 

UBScrewed's picture
Joined: 2009-07-11

I have been a RIF victim of UBS and they are very set on thier agenda of selling this sh*tt..firm before the U.S. Justice Dept. siezes all thier assets.

UBScrewed's picture
Joined: 2009-07-11

Also UBS is going to sell Paine Webber(what a great firm that was...right Don Sutton and Joe Grano) at the bottom. But in typical bank fashion they did buy Paine Webber at the top in 1999 or early 2000.  Then they bought Piper(what a mess) Jaffrey at another top of the market in 2006.  Now they are selling some branches to SF at the bottom and probably the rest as well at a bottom for far less than they paid. Why do clients and producers stay witlh the Swiss henchmen? 

secretknowledge's picture
Joined: 2009-03-28

Clients stay with the advisor not the firm. All of the firms have there own issues.

WORLD PEACE's picture
Joined: 2009-05-01

DOJ has no case.   
Its Swiss law.  
They will setlle before Sunday.   
No money.  Under a bil.
Obama's people are idiots 

UBScrewed's picture
Joined: 2009-07-11

your right they will probably settle for a few billion  after all what's a few more dollars to a firm who's lost north of 60 billion in the last 2 years.  It is the UBS way to spend thier way out of sh*t rather to spend money to repair thier tarnished reputation by really caring about clients and employees.

secretknowledge's picture
Joined: 2009-03-28


I disagree. DOJ has great case, UBS already admitted guilt in SEC deferred prosecution.

It does make sense to sue them. Company doing business on U.S. soil helps U.S. citizens break the law. In fact, each of these individuals committed perjury if they signed tax forms and indicated that they did not have a foreign account. Last time I looked Swiss law did not apply to acts that are committed on U.S. soil and vice versa.

WORLD PEACE's picture
Joined: 2009-05-01

These "numbered" accounts were in Switzerland, not US Wealth Managemnt.
· People will "find out you have a Swiss account" only if you tell them. Swiss law prohibits the bank not only from revealing your balance, but from acknowledging that you're a customer or revealing when you made your last transaction. Bankers can go to jail for violating Swiss privacy laws.· Banking secrecy evaporates if a Swiss judge is convinced that you have used a Swiss bank to commit a serious crime such as financial fraud, embezzling, money laundering or drug dealing. It has to be a major crime under Swiss law, even if it was committed elsewhere. · On the other hand, it's not a major crime in Switzerland to hide money from an ex-spouse or the taxman, so an American divorce attorney and the IRS can't pry information from a Swiss bank. 
Obama's people hate personal individual freedom, free markets and capitilism. 

WORLD PEACE's picture
Joined: 2009-05-01

Its a game of chicken.  
Obama's SS Nazi DOJ/IRS wants people to turn themselves in.  They have offered better deals for people who turn themselves in.
They had criminal evidence on the people that UBS gave them.  Here they are playing games.     
This is not really UBS anymore.   The swiss govt has said kiss my a$# on the other names.
They have no case.   Its the laws of another GD country.
The judges comments are basically saying to Obama's nazis "dont f&^%$ with me" because I am going to call your bluff.   In other words,  you better be willing to shut down UBS usa (Paine webber) ASAP becasue I will not play these games.   They are messing with laws of a sovereign country.  Its a worthless bluff and the judge knows it.

LogansRun's picture
Joined: 2009-01-25

Secretknowledge, what now? (delay just announced until Aug. 3rd, then earnings...)

Read that any fine will only reduce tier 1 cap by a small margin and bank has capital...

How do they stay competitive going forward and who are the potential suitors if a sale at this time? Barclays? JPM was mentioned, but...

Comments from anyone?

WORLD PEACE's picture
Joined: 2009-05-01

a stay because DOJ has nothing
UBS is telling them to F off
lets go to court.
Obama nazi's lose
its over.  settle for less then a bil.    goes away

secretknowledge's picture
Joined: 2009-03-28

UBS is spun off with no capital markets business. Grano and Sutton come back to run.


JP Morgan buys.

I think that a new head, spinoff and settlement are all tied together.

They can not let this keep on going forever as it will be bad for U.S. Wealth management business

secretknowledge's picture
Joined: 2009-03-28

I find your NAZI quote offensive. Maybe you can post a rational thought or scenario instead. Do you have thoughts like those?

WORLD PEACE's picture
Joined: 2009-05-01

yikes  powerful.   pls stop

burtonfinancial1's picture
Joined: 2008-09-30

WSJ update... as many have stated here.. settlement in the works...  It would seem it's just a question of how many account holders will be deemed fraudulent? Wonder who get's to decide that. Will UBS sell out some of their own? WSJ article excerpt.... "AG and the governments of the U.S. and Switzerland are deep in talks
to settle a major tax-evasion case that could require the Swiss bank to
reveal some -- but not all -- of the 52,000 or so account-holder names
the U.S. has sought, according to people familiar with the matter.
On Monday, a Miami federal judge agreed to postpone tax evasion
hearings against UBS to allow time for a possible settlement. The
high-stakes hearings had been set to begin Monday.
It's the latest twist in a long-running investigation that is prying
open the centuries-old tradition of strict secrecy at Swiss banks --
sending shivers among account holders. Earlier this year, the
unfathomable occurred when UBS agreed to disclose some 250 account

Greenbacks's picture
Joined: 2004-12-21

Obama's Nazi's seems to me to be accurate.  

burtonfinancial1's picture
Joined: 2008-09-30

It'll be interesting to see how this settles out. The WSJ hammered UBS unusually hard yesterday.Offshore Tax Evaders Deserve No Sympathy


Do you know anyone with a Swiss bank account? I don’t, which is
probably no surprise since the whole point is secrecy. But evidently
there are plenty of Americans who do—at least 52,000 at UBS alone—whose identities the Internal Revenue Service and the Department of Justice are trying to learn.
In light of this highly publicized investigation into tax evasion,
I’ve been wondering just why anyone needs or wants a Swiss bank
account. For African dictators, international arms traffickers and
terrorists, the answer is pretty obvious. And there are certainly
citizens of countries whose own banking systems are so precarious, and
the risks of persecution for any number of reasons so great, that a
Swiss bank account may provide welcome security.
Ample ConfidentialityBut the U.S. is not one of those
countries. Despite our recent banking woes, the U.S. has plenty of
financial institutions with impeccable balance sheets. It has a legal
system second to none that provides ample confidentiality and
due-process protections. But it doesn’t offer ironclad secrecy in the
face of a legitimate, court-sanctioned subpoena, which means it doesn’t
lend itself to tax evasion.
That is evidently why California billionaire Igor Olenicoff parked
hundreds of millions of dollars with UBS, and subsequently pleaded
guilty to a felony count of filing a false tax return. His former UBS
banker, Bradley Birkenfeld, pleaded guilty to conspiracy and testified
that UBS bankers prospected for wealthy U.S. clients eager to avoid
taxes at art shows, musical performances, yachting regattas, golf and
tennis tournaments—anywhere “rich people hang out.” They even served as
couriers to avoid money transfers that might be detected by U.S.
surveillance, according to Mr. Birkenfeld’s testimony.
All of this was met with depressingly great success: Prosecutors say
UBS managed $20 billion for U.S. customers. Earlier this year, UBS
agreed to pay a fine of $780 million, admitted that it helped U.S.
citizens evade taxes and agreed to cooperate with U.S. investigators.
But now it is balking at turning over its clients’ names.
UBS says it would violate Swiss financial privacy laws if it
complied. In that case, UBS (and its government) should be faced with a
simple choice: continue its policy of strict secrecy, in which case UBS
should forfeit the right to do business in the U.S.; or compromise,
aligning its banking laws with those in the rest of the civilized world.
Moral High GroundI have no sympathy for the bank’s plight.
Switzerland is a sovereign nation, free to pursue whatever banking laws
it deems appropriate. That doesn’t mean the U.S. has to open its
borders to the exploitation of its citizens for tax evasion and other
nefarious purposes, nor should other countries.
A trade war would be unfortunate, and the Swiss might retaliate by
banning U.S. financial institutions there. But the U.S. would have the
great advantage of the moral high ground. I think the likely outcome is
Nor do I have any sympathy for those Americans whose identities may
be made known, especially those like Mr. Olenicoff, a billionaire who
owned a yacht and maintained foreign accounts in multiple so-called tax
havens. Those who have accepted an offer of amnesty should count
themselves lucky. Paying taxes is an obligation all American citizens
share, but somehow tax evasion seems more reprehensible when committed
by the rich, who owe their prosperity to this country and could so
easily meet their obligations.
With the Madoff scandal still fresh in the public mind, I hope the
Justice Department maintains its tough stance. The wealthy need to be
reminded that all Americans stand equal before the law.

James B. Stewart, a columnist for SmartMoney magazine and,
writes weekly about his personal investing strategy. Unlike Dow Jones
reporters, he may have positions in the stocks he writes about. For his
past columns, see:

7 Figs's picture
Joined: 2009-06-15

By the end of 2009, all things going somewhat smooth, UBS will sell its US assets to either RBC or JPMorgan.  They are out of the US.....if you've been watching their actions for the last 6 months and the US Gov'ts, you'll see that the writing is on the wall.

BOLIO's picture
Joined: 2009-04-23

There are many UBS employees who would welcome being sold. Many feel their practice would thrive with a name change. I hope it is not another European bank (HSBC). JP Morgan seems logical. I think Stifel Nicolaus  should buy a few more branches (starting with mine).  I hear they are a nice firm. Who knows. But I think UBS is short lived here in the US.

burtonfinancial1's picture
Joined: 2008-09-30

I agree a sale would probably be a real lift for everyone involved. PRAY that its' not someone like HSBC as mentioned by BOLIO.  That would be catastrophic from an organizational and cultural standpoint and not worth any amount of retention $.  HSBC swooped into the US over the last decade and has made one strategic disaster after the next. They just closed down and basically walked from their overpriced 6 year investment in consumer lenders Beneficial Finance and HFC (Household) Finance after realizing that it's probably not a great business plan to paste your global brand on high rate/high cost hard money lending shops in every strip mall throughout America. HSBC's compensation structure and even their entire compensation philosophy that they push globally is also very "European"; the typical UBS advisor would never stand for it. 

WORLD PEACE's picture
Joined: 2009-05-01

DOJ game of chicken over.
Obama socialist d-bag pussies lose
peanut fine.    it goes away.
way to go Swissy's
a win for personal indivual freedom

Lew Ashby's picture
Joined: 2009-01-13

BOLIO wrote:
There are many UBS employees who would welcome being sold. Many feel their practice would thrive with a name change. I hope it is not another European bank (HSBC). JP Morgan seems logical. I think Stifel Nicolaus  should buy a few more branches (starting with mine).  I hear they are a nice firm. Who knows. But I think UBS is short lived here in the US.

A spinoff (maybe get back the Payne Webber name?) or a buyout would be most welcomed by most of the UBS FA's I know.  I've only lost one client during this mess due to the well-publicized problems at UBS, but the UBS name certainly hasn't helped my business either.  The name JP Morgan has a nice ring to it, but I wouldn't ever want to be confused with a Bank bank broker.
The writing is indeed on the wall, though.  I can see it on the face of management-- They can't hide it anymore.  If they do it, though, I hope we retain all of our platform capabilities.  Going to Stifel would be a huge step backwards in that regard, IMHO.  The sooner they do it, though, the better.....however, maybe between now and then I can get back to above $500K T12 for retention.  Hey, am I the first to mention that word on this thread?

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