One of the more curious features of the wealth management business over the last few years was the unfair competitive advantage that some firms had over others because of their innate ability to offer tax-evasion-as-a-service to high net worth investors as a selling point.
It’s nice to hear that someone out there in Governmentland actually cares…
From the Financial Times:
UBS and the US government have agreed an out-of-court settlement to end one of the most bitter assaults on Switzerland’s hallowed bank secrecy.
No details of the deal were revealed on Wednesday, pending formal signing, probably early next week. However, lawyers said the settlement would involve UBS supplying the names of least 5,000 US offshore clients and possibly paying a big fine.
See, the way it works in Switzerland is that as long as what you’re doing isn’t unlawful under Swiss law, they won’t ever turn you in to a foreign authority. Tax evasion doesn’t make the Swiss code of laws, so anyone with a passport has historically been able to bury all manner of blood money and ill-gotten lucre into a numbered Swiss account (believe it or not, I learned all about this stuff from the Jordan Belfort book, The Wolf of Wall Street…LOL).
The vagaries of Swiss banking law don’t really concern me. If there are institutions in this world that feel the burning desire to launder stolen UN aid money for Third World despots, c’est la vie.
It does concern me, however, when some financial advisors, working for a foreign bank, have the ability to market this aspect of their offerings against other hardworking American reps who do not offer shelters and loopholes.
In the UBS case, they actually had some guys armed only with encrypted laptops, Patek Phillippe watches and no licensing whatsoever rounding up customers who were American citizens that happened to have had business interests overseas.
I don’t typically troll the polo and regatta scene looking for clients, so I can’t truly claim that I’ve been affected personally, but we’re talking about principles here.
Now as far as the whole “UBS. You and Us.” campaign…I guess snitching on 5000 US clients kinda contradicts that whole notion. A bank’s gotta do what a bank’s gotta do, I guess.