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Trust UBS? Mein Gott im Himmel, nein!
At the top of the banking heap is Switzerland’s largest and most notorious bank, UBS.
This is the tarnished bank that was considered too big to fail, so the Swiss politicians forced its taxpayers to pay the bill for a US$5.6 billion bailout package while UBS posted a record loss of SFr9.58 billion (US$8.6 billion) in 2008 and a 2009 net loss of SFr2.74 billion (US$2.5 billion).
But now, dear readers, hoorah! UBS is on the profitable comeback road.
Two weeks ago the bank announced it made a net profit of SFr1.8 billion (US$2.03 billion) in the first quarter of 2011. Yes, well that’s 18% less than a year ago, but still 7% more than in the final quarter of 2010.
Trust UBS; Are You Kidding?
UBS chief executive Herr Oswald Grübel (below) proudly crowed that these improving figures reflect the “re-established trust” of the bank’s clients.
Is Oswald joking? Trust UBS?
Perhaps he is speaking of the bank’s reduced number of remaining clients after billions of dollars and euros have fled UBS; after a IRS-frightened UBS abruptly closed hundreds, if not thousands of accounts held by Americans, some going back decades; after they turned over 4500 U.S. persons’ names to the U.S. Justice Department under threat of being banned from doing business in the U.S.; and last, but not least, after UBS achieved the dubious distinction of single-handedly destroying the Swiss Bank Secrecy Law of 1934.
More UBS Criminal Acts
A week after Herr Grübel announced his hopeful 2011 numbers, it was revealed that UBS had agreed to pay $160 million in fines and restitution because its employees conspired to rig bids in the U.S. municipal bond derivatives market.
UBS’s old friend, the U.S. Justice Department, the U.S. Securities and Exchange Commission, the IRS and 25 state attorneys general entered into the agreement with UBS, which admitted that, from 2001 through 2006, its employees repeatedly manipulated the bidding process when local U.S governmental entities or nonprofit organizations sought to invest the proceeds of municipal bond offerings. (Fear not: those bad guys have all been fired).
“Our complaint against UBS reads like a ‘how to’ primer for bid-rigging and securities fraud,” Elaine C. Greenberg, chief of the S.E.C.’s municipal securities and public pensions unit, said at a press conference announcing the settlement.
2009 Fine
Remember that Herr Grübel’s “trusted” UBS in 2009 also paid a fine of $780 million to the U.S. government, acknowledging that its agents for years assisted an unknown number of American clients to illegally evade millions in U.S. taxes.This UBS criminal tax activity not only added to UBS financial instability – at the time already $50 billion in the hole because of bad investments exposed by the global recession – but this illegal conduct needlessly compromised, indeed ended, the traditional privacy policies and bank secrecy laws of the Swiss government.
As to UBS financial acumen, the bank’s losses from its ill-conceived bets on America’s low-income mortgage market totaled around US$14.2 billion, putting it neck-and-neck with Citigroup as the biggest loser from the sub-prime mortgage crisis.
UBS Harmed Switzerland
The greed of UBS tarnished not only its own reputation, but also, unjustly, that of Switzerland and the 7.6 million Swiss people.
UBS also provided ammunition to the tax bullies at the IRS allowing them to: 1) smear hundreds of thousands of honest Americans who bank offshore; 2) attempt to scare away many thousands more who could benefit by doing so; 3) pretend to extend U.S. tax law jurisdiction to the entire world; 4) use blatant economic blackmail against not only an errant bank, but against a friendly country, long America’s faithful ally.
Not Our Favorite Swiss Bank
Long time members of the Sovereign Society know that for over a decade we have recommended against UBS as a Swiss bank for offshore accounts — and that was not only because of its monster size and impersonal service. What concerned us was the UBS anti-privacy policy.
The merger of Swiss Bank Corp and Union Bank of Switzerland creating UBS AG was approved by the U.S. Federal Reserve Board in 1999 — but only after UBS supinely agreed to provide the U.S. government with all information “necessary to determine and enforce compliance with . . . [U.S.] federal laws.” (What liars they turned out to be!)
That 1999 surrender went far beyond the financial information required to be exchanged under the then existing U.S.-Swiss Tax Treaty and it also nullified Swiss bank secrecy laws that usually require a court order to release private banking information.
UBS caved in after the U.S. government threatened to shut down the bank’s extensive American financial operations. (Does that sound familiar?) The UBS sell out was bad news for financial privacy seekers – and at the time it blew a large hole in the much vaunted concept of Swiss “bank secrecy.” Who knew then that UBS eventually would destroy all Swiss bank secrecy?
Sickening
I’ve said this before, but I’ll say it again: I’ve written so much about the UBS mess over the last three years that I’m sick of it…and sick of the greedy, crooked UBS bankers and staff that stupidly thought they could make wholesale use of Swiss bank secrecy laws to cover their lucrative illegal tax evasion advice, while running up fat fees for themselves and billions in deposits for stupid UBS management. (Fear not: UBS says all those miscreants have been fired, replaced with new miscreants?)
Make no mistake – I remain decidedly pro-Switzerland. It is the world’s leading offshore financial center. But I am not pro-UBS! Trust indeed, Herr Grübel; Mein Gott im Himmel, nein!
We Can Help
At the Sovereign Society we meet regularly with Swiss and other offshore bankers who, unlike UBS, can be trusted. We have agreements with reputable Swiss private banks willing to accept accounts from those who identify themselves as Sovereign Society members.
These arrangements are in full compliance with IRS and SEC rules and other U.S. tax and reporting laws. U.S. clients must sign an IRS Form W-9 that allows athe bank to report required information to the IRS.
As it has been since our founding 14 years ago, our staff is available to assist our members in opening a Swiss or other offshore account. Take advantage of these special Swiss banking arrangements and the advice of our Swiss advisors — sign up here for Sovereign Society membership. Once you are a member, you can contact us for help via email at info@sovereignsociety.com
Other Posts from the Author
- Are You Among the 23% Entitled to a Second Passport? - May 14th, 2012
- The Real Problem With the French Elections - May 4th, 2012
- The Life of a “Sovereign Individual” - April 24th, 2012
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Dancing on the edge of a razor blade aren’t you, Mr. Baumann? One post the IRS is Goebbels and the next post you write “its agents for years assisted an unknown number of American clients to illegally evade millions in U.S. taxes.”
Most people would say that morally there is nothing “illegal” about depriving Goebbels of millions in stolen loot. And “illegally” violating US tax law is like “illegally” escaping from a concentration camp.
BOB REPLIES: Nothing inconsistent in these two statements. “Agents” refers to UBS staff that systematically aided US taxpayers in evading taxes. However harsh the IRS may be, that is not justification for violating US tax laws and evading legal taxes.
Dear Bob, My name is Daniele, I am Italian and live in the US since 92. I still holding my Italian passport and actually my home town is very close to San Marino. Even before the current economy crises I wanted to have an off-shore account, mostly because I do business Internationally and I have in the past consider my option to open a Bank Account either San Marino, or Switzerland or in the US Virgin Islands. Based to the above I read your article with high interest, however unless I’m missing something I don’t understand what is the advance that you are claiming on doing business with those other Swiss Bank and open an off-shore account there, if any american or legal Alien need to sign a W-9 and those bank are then going sent those report to the IRS…?? When this whats going to happen, why go through the trouble — will just easier to leave the money on a Bank in the US… Sorry but I don’t see the difference…Best, Daniele
BOB REPLIES: Dear Daniele: Thanks for your comments, but I urge you to reconsider not opening an offshore bank account. I think for anyone living in the US today with even modest wealth, either a citizen or resident alien, an offshore account is a necessity.
An offshore account provides a platform for easier and profitable foreign investing; provides much better asset protection since it puts your cash outside US government and courts jurisdiction; provides much stronger financial privacy (there is none in the US now); and it gives you more flexibility in your estate planning.
And don’t be concerned about signing an IRS Form W-9. US persons are obliged by law to report offshore accounts to the IRS and this form helps you do that. The day is long gone when any sensible US person tries to hide cash from the IRS.
For more about this read “Offshore Bank Accounts a Necessity” which I wrote.
BOB REPLIES: Nothing inconsistent in these two statements. “Agents” refers to UBS staff that systematically aided US taxpayers in evading taxes. However harsh the IRS may be, that is not justification for violating US tax laws and evading legal taxes.
There sure is! “Agents” could also refer to the free french liberation trying to prevent the transfer of looted french property being sent to finance Hitlers war. I guess they were “illegally” violating Goebels “tax” laws.
And this illustrates the inconsistency of your position. On the one hand you “urge” people like Daniele to put “your cash outside US government and courts jurisdiction” and on the other you claim that this depriving this government of their loot is “illegal”. At what point will you finally acknowledge the the Federal government is goebels? When they start murdering innocents in their 10th war? When they shut down your blog? when access to their single payer medical system is prohibited to non-democrat party voters?
[...] above was the irreverent headline on my blog entry for May 10th earlier this year when I discussed the claim of UBS chief executive Herr Oswald [...]