UBS' "prime jewel" was their courting of the ultra wealthy. Now it appears that part of their success was because they allowed the wealthy to avoid taxes via "secret" accounts:
A U.S. judge yesterday granted the IRS power to issue a summons demanding that Zurich-based UBS reveal the names of U.S. customers who may have used secret accounts at the bank to avoid taxes. Last month, former UBS private banker Bradley Birkenfeld pleaded guilty to conspiracy and said the bank helped wealthy U.S. citizens conceal $20 billion in assets.
Yesterday, we had this news about UBS from their Chairman:
The news came as Peter Kurer, chairman of UBS (NYSE:UBS) , told a Swiss television channel that the bank would not need additional capital following its $15bn rights issue. http://us.ft.com/ftgateway/superpage.ft?news_id=fto070220081429058024&referrer_id=yahoofinance
Today we have this news on UBS:
July 3 (Bloomberg) -- UBS AG may post $6.9 billion of additional writedowns and seek to raise more capital, Citigroup Inc. said, a day after Chairman Peter Kurer told a newspaper the largest Swiss bank won't need more funds.
The Zurich-based company, which wrote down $38 billion over the past three quarters, still carries $83 billion of ``risk exposures that are likely to require further markdowns,'' London- based Citigroup analyst Jeremy Sigee said in a note today.
Sigee, who rates UBS a ``hold'' with a ``high risk'' caveat, estimates the company may post a loss of 4.5 billion Swiss francs ($4.4 billion), and announce writedowns of as much as 7 billion francs when it reports second-quarter earnings Aug. 12. JPMorgan Chase & Co. analysts yesterday said UBS may need to mark down its assets by a further 5.1 billion francs.
Sigee blamed a slump in financial markets for asset price declines, and said UBS may need to raise more capital, either from asset sales or from shareholders. Kurer, in remarks published by Swiss newspaper Finanz & Wirtschaft yesterday, said the bank won't need more funds.
Anyone want to bet that the IRS is going to get a straight answer? I doubt that! They'll throw someone to the Feds and then it will be business as usual.
And in their case, it appears to be more writedowns!