Billionaire case in Paris: Is UBS swallowing the bitter pill in France?

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The legal dispute has been going on for a decade. French authorities have been investigating the matter since 2013. In February 2019, UBS was ordered by the Paris criminal court to pay a hefty sum totaling €4.5 billion for the first time for aiding and abetting illegal financial transactions and money laundering.

The bank was also found guilty in the second trial in December 2021. The French appeals court found that the big bank illegally collected money from wealthy French taxpayers between 2004 and 2012. According to the decision, he wanted to persuade customers to open undeclared accounts in Switzerland.

New evidence is not allowed

However, before the “Cour d’appel” in Paris, the penalty was significantly lower. The court requested a total payment of 1.8 billion euros. This includes a fine of 3.75 million euros, confiscation of 1 billion euros and compensation of 800 million euros.

UBS appealed this decision once again. At the end of September there was a hearing at the Supreme Court, France’s highest authority. The “Supreme Court” does not try the case “de novo” but instead deals with the question of whether the appellate court applied the law correctly. Checks decisions for legal errors. The parties made a defense; but no new evidence was presented.

The court will now announce its decision in writing on Wednesday, probably in the early afternoon. If France’s highest court had anything to criticize about Wednesday’s ruling, the case would have gone back to the appeals court. It will be a new procedure, so to speak. However, if UBS’s appeal is rejected, the bank will lose before the final court in France.

In the first case, the new procedure, the cards would theoretically be reshuffled. The court is not obliged to impose a lighter sentence. However, according to experts’ experience, UBS can expect lower demand. In the latter case, in the event of final defeat, the decision of the court of appeal in France will be legally binding.

Is it better to put it aside?

UBS apparently assumes it can succeed in its complaint. Otherwise he probably wouldn’t have filed an appeal. But victory will also mean that this legal issue will remain uncertain for much longer. Some market analysts had already expressed the opinion that after the decision in December 2021, it would be better to accept the decision and shelve the case.

However, if UBS had accepted the verdict, it would have also accepted the guilty verdict. The institute would have admitted to helping criminals launder money, which poses a risk to the further development of global trade. The bank denies any wrongdoing.

Patrice Spinosi, a lawyer defending UBS in France, described the case at the hearing in September as extraordinary: because it was the first time in Europe that a Swiss bank was convicted for managing customer money “in accordance with banking secrecy”.

A great success for UBS

Stéphanie Gibaud, the whistleblower and former UBS employee who prosecuted the case, now makes serious allegations against the French government. She told “NZZ am Sonntag” that she was forced to cooperate with the authorities. And the government’s fight against tax evasion has turned into a complete masquerade: “With the campaign against UBS, the government wanted to keep its own scandals regarding the illegal financing of the party at bay.”

If the case is actually reopened before the appeals court, this will consume resources and energy for even longer. But UBS needs to do a lot of work on CS integration right now, so they already have their hands full.

UBS allocated 1.1 billion euros. Therefore, there is a high risk of additional losses if the French Supreme Court upholds the appeal court’s decision. UBS had recently settled three of its other open and large legal disputes (RMBS, Archegos, Mozambique); the last two were inherited from CS. (pbe/SDA)

Source :Blick