Bloomberg – UBS AG, reeling from record losses, said the U.S. Department of Justice is investigating whether the world’s biggest money manager for the wealthy helped clients evade American taxes.
One senior bank employee was “briefly detained” by U.S. authorities as a “material witness,” the firm said in an e- mailed statement. The Financial Times reported that the employee was Martin Liechti, the Zurich-based head of UBS’s international wealth management business for the Americas. Rohini Pragasam, a UBS spokeswoman in New York, declined to comment on the FT report. Liechti could not immediately be reached for comment.
Clients pulled a net 12.8 billion francs ($12.1 billion) from UBS’s asset- and wealth-management units in the first quarter, the first withdrawal in almost eight years as the bank’s writedowns swelled to $38 billion. German prosecutors said in March they’re weighing a criminal investigation into whether UBS helped clients evade taxes.
“UBS has been hit by a perfect storm,” said Edwin Merner, who oversees $2 billion at Atlantis Investment Research Corp. in Tokyo. “Clients may run away if they think they’ll leak information to tax authorities in Germany and the U.S.”
