There are so many interesting jurisdictional issues in the U.S. government’s prosecution of foreign bankers allegedly involved in the manipulation of benchmark London Interbank Offered Rates, calculated in London under the auspices of the British Bankers’ Association. Last December, Covington & Burling laid out at least three solid arguments for why U.S. courts shouldn’t hear the government’s criminal case against Roger Darin, a Swiss UBS interest-rate trader charged with one count of conspiracy to commit wire fraud by supposedly submitting false reports of UBS’ yen Libor, including the territorial limits of the U.S. wire fraud statute and Darin’s due process right not to be tried in U.S. courts for conduct that took place entirely outside of the United States.
But in an opinion issued Friday, U.S. Magistrate Judge James Francis of Manhattan made clear that Libor defendants aren’t going to be able to slough off U.S. criminal charges with jurisdictional arguments. The magistrate judge took quite a broad view of what constitutes a “nexus” between Darin and the United States. Under his interpretation, as long as an alleged Libor conspiracy participant was aware that the rates were published in the United States and were likely to affect trades with U.S. counterparties, the defendant can be tried in U.S. courts.
Darin’s motion to dismiss the government’s criminal complaint argued that the UBS trader had no connection with the United States. He’s a Swiss citizen who worked in UBS’ Zurich, Singapore and Tokyo offices. He reported a daily hypothetical rate for interbank yen loans via a British regulatory body. And according to his lawyers at Covington, Darin had no idea that submitting a false report could be construed as a crime in the United States. His emails, they said, reflect that his biggest concern was not that he’d face prosecution but that UBS would be kicked off the panel of 16 banks whose reports determined the daily yen Libor average.
A former UBS AG (>> UBS AG) banker who helped U.S. authorities prosecute the Swiss bank in a tax fraud case has asked for permission to travel to France to comply with a subpoena in another investigation of the company, according a court document.
Bradley Birkenfeld, who received more than $100 million for being a whistleblower but also served 30 months in prison in the U.S. case, has been subpoenaed to take part in the French case later this month, according to a motion his lawyer filed in the U.S. District Court of Southern Florida.
Birkenfeld, who pleaded guilty in 2008 to conspiring to defraud the United States, remains on supervised release from prison. He must have court permission to go to Paris to appear before a judge on Feb. 27 in the French UBS investigation.
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Citigroup Inc (>> Citigroup Inc), Goldman Sachs Group Inc (>> Goldman Sachs Group Inc) and UBS AG (>> UBS AG)agreed to pay $235 million in cash to settle U.S. litigation accusing them of concealing the risks of mortgage securities sold by the former Residential Capital LLC before the global financial crisis.
The preliminary settlement with investors who bought the securities was made public on Friday in filings with the U.S. District Court in Manhattan, and requires court approval.
It is separate from a $100 million accord that investors reached in 2013 with ResCap entities and individuals. That accord has won court approval.
Law360, Los Angeles (February 04, 2015, 10:32 PM ET) — Federal authorities are investigating UBS AG for potentially helping Americans evading taxes through so-called “bearer securities” mostly prohibited in the U.S., about six years after the Swiss banking giant paid $780 million to resolve a similar international-tax dispute, according to a Wednesday report.
The U.S. Attorney’s Office for the Eastern District of New York is examining evidence collected with the FBI, to decide whether UBS employees helped facilitate tax evasion or participated in securities fraud, or if any employees engaged in criminal behavior by covering up…
SAN FRANCISCO (CN) – A federal judge dismissed a class action claiming Swiss banking giant UBS made billions of dollars by improperly closing accounts of secret account-holders, including those of a former Indonesian vice president.
Lead plaintiff AM Trust, the trust of former Indonesian Vice President Adam Malik,accused Zurich-based UBS in September 2014 of shutting down the accounts of people who died or were absent for prolonged periods, and of “withholding or destroying internal records pertaining to these accounts and converting the proceeds to their own use while wrongfully denying requests for information and accounting.”
The trust also sued the bank’s predecessors, Union Bank of Switzerland and Swiss Bank Corporation. UBS was formed in 1998 from the merger of the other two banks.
Before his death in 1984, Malik, who was also the 26th president of the United Nations General Assembly, had more than $5 million in cash and gold in Union Bank of Switzerland and UBS bank accounts, the trust said.
Law360, Los Angeles (December 17, 2014, 9:37 PM ET) — France’s highest court has rejected UBS AG’s appeal of a €1.1 billion ($1.36 billion) bond for a French investigation into claims that the Swiss banking giant helped wealthy French clients dodge taxes, UBS said Wednesday.
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UBS Group AG (UBSG), facing the threat of competition fromGoogle Inc. (GOOGL) and Amazon.com Inc., has turned to a Singapore-based technology company that uses artificial intelligence for help delivering personalized advice to the bank’s wealthy clients.
Sqreem Technologies Pte. Ltd. beat some 80 teams competing in the Innovation Challenge, a contest organized by Switzerland’s biggest bank that offered S$40,000 ($30,000) and a potential contract to the winner. Their task: Extract the information most relevant to an individual client from an explosion of data and deliver this tailored content to clients’ mobile phones, iPads and other digital devices.
“Banking is one of the most rudimentary industries when it comes to digitalization,” Dirk Klee, chief operating officer for UBS wealth management and responsible for digital initiatives, said in an interview. “EBay, Amazon – everything is getting more and more digital. The question is how we translate this into a similar experience for our clients.”
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