UBSU.S. Strike Last-Minute Deal – US-FOREX.US
UBS has narrowly avoided a court hearing after reaching an “agreement in principle” with U.S. authorities over a tax conflict that has mired the bank’s road to recovery.The agreement was reached on “major issues” while outstanding issues were expected to be resolved in the coming week, UBS said in a statement on Friday. It follows a telephone conversation between Stuart Gibson, a lawyer representing the U.S. Department of Justice, and Alan Gold, a U.S. district judge in Miami, Fla. Shares of UBS
surged 4.4%, to 15.68 Swiss francs , in Zurich, reflecting investor relief that a two-day hearing meant to commence on Monday was avoided.UBS, the Swiss government and the Department of Justice have been engaged in a public tussle since February, after the IRS demanded that the bank hand over the details of some 52,000 U.S. citizens in an investigation into tax avoidance. While UBS has handed over the details of some 300 clients as part of a separate settlement, the Swiss government has warned that it could be forced to seize the information, or even prosecute UBS should the information be handed over as it violates Swiss secrecy laws. The apparent unwillingness of either the Swiss or U.S. government to bend left UBS in an unenviable position, facing penalties in either locality.
Three U.S. citizens have already pleaded guilty to avoiding taxes, based on the information that UBS provided in the earlier settlement. The latest development came as U.S. Secretary of State Hillary Clinton met with Switzerland’s foreign minister, Micheline Calmy-Rey.