UBS tells int'l wealth managers not to go abroad

FWR Staff

6 April 2009

Ban pending bank's review of compliance measures it needs to have in place. UBS has grounded more than 1,000 of its wealth-management advisors pending a review of its "policy and compliance framework" for its international private-client business, according to media reports.

"Last week, we issued a general travel ban for all staff with client contact in international wealth management," a UBS spokeswoman told Reuters. "UBS is currently conducting a review of its policy and compliance framework for its international wealth management offering."

Don't go there

The move seems to be connected with the Swiss bank's ongoing legal troubles with U.S. authorities and attacks on its status and a tax haven from several quarters.

Two months ago UBS admitted to having committed tax fraud by urging wealthy U.S. clients to open accounts in Switzerland in order to keep income hidden from the IRS, provided names of about 250 of its U.S.-customers with Swiss bank accounts, and agreed to pay a fine of $780 million. But it has balked at U.S. demands that it name all Americans with Swiss accounts.

The other day U.S. authorities nabbed Palm Beach, Fla.-based CPA Steven Rubenstein, a client of UBS Wealth Management, and charged him with tax evasion.

When the U.S. investigation gathered steam last spring, UBS put a moratorium on providing offshore banking and brokerage services to U.S. residents, and stopped advisors based in Switzerland from travelling to the U.S. for client meetings.

Now, with the U.S. and some Western European countries apparently eager to crack down on what they view as Swiss-assisted tax evasion, UBS and several other big Swiss private banks want to protect their employees from seizure and prosecution abroad, according to a week-old report in the Financial Times.

"This is an immediate step to reduce compliance risk," a UBS spokeswoman told the Swiss newspaper Sonntag Blick. "We are conducting the review because of the complex regulatory environment of UBS international wealth management," the spokeswoman said. -FWR

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