Under pressure, UBS dumps offshore banking

UBS AG will no longer provide offshore banking and securities services to U.S. residents through its bank branches, Mark Brunson, chief financial officer of its global-wealth-management business, told a Senate permanent subcommittee on investigations today. The Zurich, Switzerland-based firm is being investigated as to whether its clients used offshore accounts to hide assets and avoid paying taxes (InvestmentNews, July 2) . The company will wind down its offshore business, won’t allow new accounts and will forbid advisers from Switzerland from coming to the United States to meet with American clients, Mr. Brunson said. Additionally, UBS will work with the federal government to identify the names of U.S. clients who may have engaged in tax fraud, he said. “UBS genuinely regrets any compliance failures that may have occurred,” Mr. Brunson said. “We will take responsibility for them; we will not seek to minimize them,” he said. “We will take the actions necessary to see that this does not happen again.” Mr. Brunson noted that client identities are generally protected from disclosure under Swiss law, but added that those protections don't apply when the disclosure of client names is requested in connection with a tax fraud investigation.