UBS has been ordered to pay a record €3.7 billion (£3.2 billion) fine and a further €800 million in damages after the Swiss bank was found to have helped French clients dodge tax.
Shares in the bank dropped almost 5% following news of the penalty, before climbing back to stand 2.7% lower. UBS said it ‘strongly disagrees’ with the verdict and would appeal, claiming it was ‘not supported by any concrete evidence, but instead is based on the unfounded allegations of former employees’.
During the six week hearing, the court had heard that UBS helped clients hide billions of euros from French tax authorities between 2010 and 2012, and then launder the proceeds.
The trial echoed a similar case heard in the US in 2009 – which was instrumental in a regulatory drive to force Swiss banks to abandon their former client anonymity – and in Germany in 2014.
The total was discounted from the €5.3 billion penalty initially demanded by prosecutors but is, nonetheless, the largest tax fine in French history – equivalent to around a year of UBS's profit.
They had earlier accused the bank of using ‘James Bond’ techniques, such as advanced evasive tactics and self-wiping hard drives, to cover its tracks as it courted clients and helped them hide their wealth, saying the abuse had been ‘systematic’ and carried out on an ‘industrial’ scale.
UBS had earlier rebuffed the offer of a €1.1 billion settlement and had set aside €2.4 billion.
It strongly rejected the ruling, saying that the court had heard no evidence that it had solicited French clients on French soil, and that it had no jurisdiction on decisions taken in its Swiss base.
‘The verdict also lacks proof and a credible methodology for the calculation of the fine and damages,’ it added.