Swiss mull UBS subprime prosecutions: report

27th October 2008, Comments 0 comments

Swiss prosecutors are looking into whether UBS employees have broken the law by providing incorrect information about the bank’s exposure to the subprime mortgage crisis.

27 October 2008

ZURICH - Swiss prosecutors are examining whether officials at UBS AG broke any laws by withholding information about the bank's exposure to the subprime mortgage crisis, according to a newspaper report Sunday.

Zurich prosecutor Andreas Ochsenbein is quoted by Swiss weekly Sonntag as saying the office for economic crimes was reviewing "publicly available information" and had talked to a small number of UBS employees.

Ochsenbein was quoted as saying the interviews were not formal interrogations. He reportedly did not specify what crime might be suspected. But Sonntag reported that prosecutors were examining statements by senior managers and the bank's board that later proved to be wrong.

Under Swiss law, providing untrue or incomplete information of importance to investors is punishable by up to three years imprisonment.

Switzerland's biggest bank has suffered losses and writedowns totalling some CHF 45 billion over the past year because of bad investments in the US subprime market and other risky financial instruments.

Earlier this month the bank asked the Swiss government for help and received a financial assistance package containing a CHF 6 billion loan to bolster its reserves and CHF 54 billion to help it dispose of high-risk securities. Profits from the sale of these assets will be shared between the Swiss National Bank and UBS.

Two weeks before the bailout, chairman Peter Kurer had told shareholders that UBS "remains one of the best-capitalised banks".

UBS spokesman Andreas Kern said the bank would not comment on the Sonntag report.

Calls to the prosecutors’ office in Zurich went unanswered Sunday.

[AP / Expatica]

0 Comments To This Article