UBS AG booked a near $300 million charge in the second quarter mainly to settle claims it helped wealthy Germans to dodge taxes, the latest in a string of lawsuits that have targeted its private banking business.
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UBS, which faces a separate probe in Germany and similar probes in Belgium and France, took a 254 million Swiss franc ($280.8 million) charge and said it aimed to have all its German clients come clean by year-end, from more than 95 percent.
Yet the charge is only one of a slew of legal issues with which the bank is contending. It hiked its provisions against future litigation to nearly 2 billion francs but warned this might still not be enough to cover possible fines and charges.
The bank has taken a strategic decision to scale back its risky investment banking operations in favor of private banking and asset management, but remains under threat from possible past market transgressions.
Underscoring that risk, it said in its quarterly results statement U.S. regulators were probing its off-market share trading venue or dark pool, an area where Germany's Deutsche Bank also said it was under scrutiny.
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The settlement in the German tax case comes less than a week after a 15-month French inquiry into UBS escalated, with the bank put under formal investigation on allegations it laundered the proceeds of tax evasion.
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The tax probes are only one of UBS' legal worries. It is among a handful of large banks regulators are investigating over alleged rigging in the $5 trillion-a-day foreign currency market. In March, UBS said it had widened an internal probe of forex to include precious metals trading.
In the U.S., authorities are probing UBS for criminal fraud after a former broker in Puerto Rico allegedly directed clients to improperly borrow money to buy mutual funds that later plunged, Reuters reported last month.
The Swiss bank was fined $780 million for helping wealthy U.S. citizens avoid taxes in 2009.