The Swiss bank aired its exasperation with a $5 billion French court fine in a criminal probe. UBS blasted the decision as flawed, superficial, and contradictory, as it heads into an appeal.
Zurich-based UBS isn't mincing words as it doubles down following a major setback in its biggest legacy issue – a criminal investigation into tax evasion as well as money laundering. For CEO Sergio Ermotti, the matter is almost personal, as finews.com reported earlier on Thursday.
Overnight, he told staff he was «astounded» at what he called the verdict's cursory nature: «it does not even pretend to address the arguments we presented during the five weeks of the trial», he wrote in a staff memo.
On Thursday, the bank detailed its problems with the verdict, which has led its shares to tumble, in a statement. In sum, UBS doesn't feel heard by French justice, which will now hear the entire case on appeal.
«Copy and Paste»
French prosecutors failed to bring a weight of «unequivocally convincing» evidence to the trail, UBS complained. The bank has always denied criminal wrong-doing, and argued that Paris is applying French law to Switzerland.
The 38-page ruling is «largely a copy and paste» from court filings before UBS' lawyers laid out their defense, the bank said. It is also unhappy that clients questioned during the trial – who would have spoken up for UBS – were discounted as uncredible.
Confusing Sums
On the more serious money laundering charges, UBS argued that the French tax code hasn't been updated to include tax fraud as a so-called predicate offense, or one which lays the foundation, until 2013. By contrast, prosecutors had accused UBS of wrong-doing from 2004 to 2012 – or before the laundering reform took effect.
The bank also accused French officials of confusing the total funds that citizens fessed up to holding in offshore accounts with the tax owed on those undeclared assets. With few exceptions, tax investigators have typically taken just a fraction of assets as recompense for the tax dodging, and not grabbed the principal.
Pugnacious UBS
UBS' lengthy take-down of the verdict underscores how crucial the case is to the bank. CEO Ermotti and long-time legal boss Markus Diethelm have reversed the bank's traditionally pliant stance on settling past scandals to go fully confrontational.
The ruling, which stands in contrast to a relatively mild settlement by HSBC's Swiss unit in 2017, is also being widely watched by the banking industry in Switzerland, for which France has been a traditional hunting ground.
