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UBS did not overturn a responsible verdict for its position in a long-running French tax evasion case on Wednesday, though the nation’s prime court docket mentioned the €1.8bn of penalties the financial institution acquired two years in the past could possibly be lowered.
Judges at France’s supreme court docket upheld UBS’s 2021 conviction for cash laundering, however ordered a contemporary trial and for the decrease court docket to recalculate a €1bn confiscation order and €800mn of damages awarded to the French state based mostly on new authorized steerage.
The case, which has dogged the Swiss lender for a decade, is about to proceed and provides to a protracted checklist of authorized disputes for the financial institution, a lot of that are tied to its rescue of Credit score Suisse earlier this 12 months.
French authorities started investigating UBS and a few native workers in 2013 over their position in serving to wealthy shoppers keep away from tax.
In 2019, UBS was discovered responsible of unlawful solicitation and laundering the proceeds of tax fraud following a landmark trial in Paris. The financial institution was ordered to pay €4.5bn, made up of a then-record superb of €3.7bn and an extra €800mn in damages, in a choice that tainted Sergio Ermotti’s earlier spell as chief govt.
UBS contested the choice and an appeals court docket lowered the penalty to €1.8bn in 2021. However though UBS has paid €800mn in civil damages to the French state, the financial institution nonetheless appealed the penalty, a €1bn confiscation order and the responsible verdict. Within the supreme court docket ruling, judges discovered that the €800mn in damages wanted higher justification.
The 2019 ruling was the results of a seven-year investigation by French authorities the place the financial institution was accused of utilizing James Bond-like techniques between 2004 and 2012 to solicit shoppers illegally and assist them launder cash.
Prosecutors argued that UBS bankers had used self-erasing arduous drives, enterprise playing cards with out logos and evasive techniques to maneuver about France in secret to enlist shoppers illegally at company occasions.
Whistleblowers alleged that UBS bankers solicited shoppers at operas, throughout searching journeys and on the French Open tennis event. UBS argued that whereas its bankers did go to France and attended social occasions, prosecutors lacked proof of the solicitation.
In its third-quarter outcomes final week, UBS booked €1.1bn of provisions in relation to the case, stating: “The wide selection of potential outcomes on this case contributes to a excessive diploma of estimation uncertainty and the supply displays our greatest estimate of potential monetary implications, though precise penalties and civil damages might exceed (or could also be lower than) the supply quantity.”
Ermotti returned for a second stint as UBS chief govt this spring after the financial institution agreed to rescue its former rival, Credit score Suisse.
The takeover has already prompted $9bn of authorized claims from former Credit score Suisse traders who misplaced out on the deal.
Since finishing the acquisition in June, UBS has set about attempting to clear up a mountain of authorized disputes wherein Credit score Suisse was concerned courting again many years.
In a press release, UBS mentioned it was disenchanted the court docket didn’t overturn the responsible verdict. “UBS continues to take care of that it acted in accordance with all relevant legal guidelines and rules always,” it mentioned. “UBS will defend itself within the forthcoming trial.”