43-year-old former UBS privte banker Bradley Birkenfeld appears to be singing like a canary, after agreeing to assist US authorities in their quest to ascertain whether UBS helped clients conceal assets in a bid to evade taxes.
Birkenfield, who has already pleaded guilty to involvement in a tax evasion schemes, declared in the written statement accompanying his plea that 'rather than risk losing the approximately $20bn of assets under management in the United States undeclared business', UBS 'assisted these wealthy US clients in concealing ownership of the assets held offshore'. Bloomberg reports that Birkenfeld admitted that he even agreed to buy diamonds for a wealthy US client using Swiss funds, and smuggled them into the US in a toothpaste tube!
The Wall Street Journal has reported that the US Federal Bureau of Investigation has now made a formal request of Swiss authorities to travel to Switzerland to commence a probe. The newspaper also reports that the Swiss banking commission has also launched an investigation into the affair.
A spokesperson for UBS, which is said to have made upwards of $200m a year from the concealed assets, said that the bank 'is treating these investigations with the utmost seriousness and will appropriately and responsibility address and correct any issues raised in the investigations'.
Birkenfeld himself faces up to 5 years in clink for his troubles. For UBS, if found culpable or negligent as an organisation, it could be worse in terms of fines, loss of business and reputational risk.
Canada's National Post reports that the seeming confidence of Merrill Lynch CEO John Thain that the firm is on the way back up, may be misplaced. Rumours have been rife the last few days that Merrill may be forced to issue a profit warning after further asset writedowns have impacted the firm's second-quarter earnings. Merrill's shares were down 4.6% Friday on the rumour.
On the good news front, The Wall Street Journal reports that Emilio Botin, Chairman of Banco Santander, said over the weekend that he expects his bank's 2008 net profit to exceed $15bn.
Finally, The Financial Times reports that Chris Hohn, from The Children's Investment Fund, gave $640m to his charitable foundation last year, pushing the charity's endowment to over $1.5bn.
Please use the 'E-Mail' button immediately under the article title to send this item to a friend.