A French court slammed UBS with $5 billion in fines and charges in a criminal trial over tax evasion and money-laundering. The Swiss bank vowed to put up a fight.
Zurich-based UBS was hit with a 3.7 billion euro ($4.2 billion) fine by a Paris judge in a long-running criminal proceeding over allegations of tax evasion and money-laundering, according to Swiss newswire «AWP» (in German). On top of the fine the bank will have to repay damages of 800 million euros to the French state, the court ruled.
The move is a massive setback for UBS, which almost immediately said it would appeal the ruling, as it had previously vowed to do in case of a defeat. «UBS will appeal the verdict and evaluate whether the written decision requires any additional steps», the bank said in a statement.
Five years ago, France ordered UBS to deposit 1.1 billion euros as a form of corporate bail after prosecutors said the bank systematically helped French citizens avoid paying taxes from 2004 to 2012. The two sides came close to finding a settlement, only for the deal to collapse at the last minute.
Scandal Series
UBS has stowed roughly $2.5 billion in total provisions to settle past scandals. Wednesday's fine marks the highest ever suffered by UBS, which has been ensnared in a series of scandals since the financial crisis including allegedly mis-selling mortgage securities in the run-up to the 2008/09 crisis, rigging benchmark interest rates, and manipulating foreign exchange and precious metal markets.
The French ruling coincides with the tenth anniversary of UBS' biggest tax evasion fine until now: in February 2009, the Swiss bank paid $780 million to U.S. prosecutors to set aside an tax evasion and fraud probe. UBS later paid German officials 300 million to settle similar allegations. The bank has argued that the French investigation was politically motivated and subsequently stiffened its resolve to fight the claims.
