UBS is a bank now proven to be guilty of systemic fraud.
And now the US Department for Justice is suggesting it assisted at least 52,000 people evade their US tax obligations.
I'm not surprised. It's not alone in such activity. But there's a strange fact that seems to have been ignored in the reporting of all this, and that is the fact that this bank is a major player in the UK. This comes from the UBS UK web site:
When wealth grows, so does the complexity of its management. At UBS your dedicated Client Adviser will seek out the specialist expertise and resources needed to help you achieve your goals, allowing you to benefit from the network and specific skills of UBS, one of the world's leading wealth managers.
As we are long-established in the UK, we understand the unique needs of those living and working here - the tax regime, regulatory environment and legislative issues - and can therefore offer you a complete range of investment services that are personalised to your individual needs.
Through our offices in London, Birmingham, Brighton, Edinburgh, Manchester, Newcastle and Taunton, we offer you local expertise, backed up by global resources
Let me ask a simple question? 52,000 cases of alleged fraud in the USA. So how many in the UK?
Who is officially asking?
Who is investigating?
Who is reporting?
We need to know. Because candidly, I don't trust this bank. It's giving me no reason to do so. In that case why is it still operating here?
And why is it doing so quite so blatantly though tax havens? There's this too from its web UK sites:
UK Domestic
David Rowe
UBS AG
1 Curzon Street
London W1Y 7FN
Great Britain
+44 20 7567 8000UK International
Hendrik Geldenhuys
UBS AG
Paradeplatz 6
8098 Zurich
Switzerland
+41 1 234 11 11Jersey
Eduard Klein
UBS AG
24, Union Street
St. Helier, Jersey JE4 8UJ
Channel Islands (U.K.)
+44 1534 701 000.
Doesn't that just inspire you with confidence as to their probity? The UK operation seems little more than a front for tax haven activity.
And then look at what they're offering:
Our products and services will assist you in planning and implementing your investment strategies so you can provide the best possible advice and support to your clients. Specialist teams provide expert advice and co-ordinate your access to all areas of UBS.
Products and services:
- Wealth management basic services
With an account and securities account at UBS, your clients have access to all the products and services of a globally oriented bank.- Open fund architecture
Our offer includes more than 3,000 investment funds licensed for distribution in Jersey.- Customised Fund Solutions
Assistance in establishing and managing your investment fund project.- Active Trading Access
Direct access to events on the international stock markets optimizes your investment success.- Structured investment products
Investment strategies for an optimal risk/return combination. Our specialists will assist you in implementing your own structured products.- Modern technology
Electronic Banking - This e-banking service provides financial intermediaries with access to up-to-date asset information, reporting functions and financial information.
3,000 offshore funds in Jersey? Just ask yourself how much is involved in that. It has to be billions.
And why in Jersey, I wonder? All available on line for you to manage wherever you are as part of your "open fund architecture" that forms part of your "investment fund project" - located in "structured investment products" (which almost always means 'avoids tax', or worse, in the parlance of these banks).
What does this say to me? That this bank stinks. That's what it says to me.
Regulators should be crawling all over this, now.
And if they're not, why not? After all, is bank surely fails all 'fit and proper' tests to be a regulated financial adviser anywhere in the world now. You just can't be guilty as they have admitted to being and pass that test. It isn't possible. In which case they should be shut down.
So why are they still trading in the UK? Can anyone tell me?
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Richard
I may be wrong but I don’t believe that it is 3,000 Jersey funds. I think its more like 3,000 funds which are licensed for distribution from Jersey (to the bank’s clients). Not quite the same thing although the effect may be similar. What it would seem to mean is that UBS worldwide have 3,000 in-house investment funds (quite feasible) and that they use Jersey as its distribution point.
Dear Richard
I have good reason for distrusting this bank: in 1999 Bank Cantrade, a subsidiary of UBS, admitted in the Royal Court of Jersey to having been “criminally reckless” in its treatment of investors. The root of this particular affair was a fraud perpetrated by Robert Young, a foreign exchange dealer, working in cahoots with the Swiss bank. The fraud, which involved churning of client monies, ultimately led to losses of some $26 million, and revealed systemic failures on the part of the bank and the Jersey regulatory authorities.
None of this would have come to light had it not been for the tenacity of American investors who became enraged by the unwillingness of the Jersey authorities to investigate (yet another sign of the lax culture that Britain has nurtured for decades). Their tenacity led to an investigation by a senior Wall Street Journal staffer called Michael Sesit, who concluded in a long cover article dated 17 September 1996, that the island’s regulatory regime was tantamount to an invitation to money laundering.
UBS had exploited this lax regulation by appointing a local politician, Pierre Horsfall (owner of a small hotel, and wholly without any relevant banking or business experience) to its local Board of Directors. It just so happened that Pierre was the President of the then Finance and Economics Committee of the States of Jersey, and in that capacity he was responsible for the island’s Financial Services Department, which fought hard against pressure to investigate the fraud.
Cantrade / UBS used its political connections to try to suppress investigation (does this sound familiar?) but the WSJ was helped by a senior official in Jersey who couldn’t stomach the corruption of the island’s politicians and civil servants who were colluding with Cantrade / UBS.
UBS continue to operate in this way. In the USA they had close connections with senior politicians like former Texas republican Senator Phil Gramm who also fought to prevent action being taken against them. There is a pattern of unhealthy relations between politicians and UBS (and no doubt other banks) which acts against public interest. We should do more to highlight these unhealthy connections.
And by the way, I was the Jersey official who advised the Wall Street Journal and helped to expose the corrupt practices of both UBS and the Jersey Financial Services Department.
Best wishes
John
But like you said, this is back in the 90’s for crying out loud! The whole system has changed.
Sara
Haven’t you just noticed they’ve pleased guilty to fraud. Systematic, systemic fraud
Is that the change in the system you’re talking about?
It sure looks like it to me
Richard
Well I know people that work at UBS, Jersey and they were not even there in the 90’s. Surprising how the finger pointing immediately goes at Jersey though. I thought this was a Swiss Bank for goodness sake! I also think you need to look at the standard of finance legislation in the UK back in the 90’s and you cannot say it was any better!
[…] Quite right. As I noted here. […]
I always wondered why you lost your job John.
P.S Miss our chats on the Fifth Floor CLMH.
Hi Malcolm
I also enjoyed our chats on the fifth floor.
best wishes
John
PS I didn’t lose my job: I resigned because I couldn’t hack the politics on Jersey. I’ve no doubt that it came as a massive relief to some when I resigned, but since I had a far more interesting job lined up in the UK, it was something of a no-brainer that I wouldn’t hang around just to get up the nose of Frank Walker et al. 🙂