UBS execs knew of rule violations

Chairman Peter Kurer and others knew as early as 2006 that some bankers may have broken U.S. securities laws.

UBS AG chairman Peter Kurer and other senior executives at Switzerland’s largest bank were aware that some of their bankers may have broken U.S. securities laws at least a year before a probe began, according to a May 2006 letter.

The letter, written by Mr. Kurer, who was then the Zurich-based bank’s general counsel, said he had received information from a whistleblower regarding the inadequate registration of bankers dealing with U.S. clients.

After receiving the information, he proceeded to interview 12 bankers regarding the complaints, the Financial Times reported.

The letter was sent to former UBS banker Bradley Birkenfeld after he made complaints regarding its practice of U.S. cross-border business.
A copy was also sent to Marcel Rohner, then the firm’s head of private banking and now its chief executive.

Mr. Birkenfeld pleaded guilty in May to helping wealthy U.S. clients avoid paying taxes by hiding funds in Switzerland and Liechtenstein(InvestmentNews May 30).

“The letter was just one step in dealing with the complaints raised by Mr. Birkenfeld,” UBS said in a statement.
“[It] was intended to demonstrate that his allegations had been taken seriously, and thanked him for bringing attention to these issues.”