UBS Nears Settlement for Credit Suisse’s U.S. Tax Evasion Violations

Settlement Talks Approach Conclusion

UBS is reportedly finalizing a settlement with the U.S. Department of Justice (DOJ) over Credit Suisse’s violations of a 2014 plea agreement regarding tax evasion by U.S. clients. According to a report by The Wall Street Journal (WSJ) on Thursday, UBS is expected to pay at least several hundred million dollars to resolve the matter.

Sources familiar with the negotiations suggested a settlement could be announced as early as this week. Both UBS and the DOJ declined to comment on the report.

Background on Credit Suisse’s Tax Evasion Case

In 2014, Credit Suisse admitted to aiding American clients in evading taxes and pleaded guilty to a U.S. criminal charge, agreeing to pay $2.5 billion in fines. This marked the largest penalty for a bank in two decades for such violations.

Despite the plea agreement, a U.S. Senate Finance Committee investigation in 2023 revealed that Credit Suisse continued to assist ultra-wealthy Americans in evading taxes. The committee alleged that the bank concealed over $700 million in assets from U.S. authorities.

UBS Faces Fallout After Acquiring Credit Suisse

UBS acquired Credit Suisse in 2023 during a government-backed rescue deal. The Senate committee’s findings held that UBS or the Swiss government should assume responsibility for any additional fines stemming from Credit Suisse’s non-compliance with the plea deal.

Implications of the Settlement

The settlement will likely close a contentious chapter for UBS as it seeks to integrate Credit Suisse and stabilize its operations following the high-profile acquisition.

The case underscores the ongoing challenges faced by global financial institutions in adhering to stringent U.S. regulations on tax compliance and financial transparency.