The Financial Times today reported that the Swiss expect about 500 challenges to the UBS agreement to share 4500 names with the IRS to be filed by year end.
www.ft.com/ubs
Not surprising. Didn't UBS expect this? Didn't the Swiss Government expect this? I hope no one was naive to the point of not expecting any kind of reaction on behalf of the duped customers.
How justice will be served in Switzerland, will be the next question. If internationally it is perceived to be too soft on UBS, it will be labeled as biased. The world will draw the conclusion that Swiss banks don't protect their customers. If ever that conclusion is not yet drawn.
If the outcome is viewed as just right, meaning it seriously repairs the customers' prejudice, it risks to bankrupt UBS or at least its reputation or what is left.
This is without talking about the other threat, that probably needs some time to develop, legal action from the duped clients in the US. I touched a word in my post of July 13, 2009.
http://egidethein.blogspot.com/2009/07/switzerland-luxembourg-other-offshore.html
The US "victims" of the fatal chain reaction: UBS solicitation - promise of confidentiality and secrecy - tax evasion - UBS' disclosure of clients' names to the IRS, could conceivably have an after play in US courts. UBS has important activities in the jurisdiction, it sent their private bankers to solicit clients, and the clients are residents. These elements could probably be sufficient to bring legal action in the US. One has only to wonder about the strange situation, where two parties in a crime, UBS and the client together committing money laundering and tax evasion, can sue one another for breach of contract.
UBS in front of a US jury? Good luck!
Egide Thein
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