Case stems from decade-old plea agreement
UBS Group AG is reportedly close to settling a US tax case tied to violations by Credit Suisse, the Wall Street Journal reported. The case stems from a decade-old plea agreement between Credit Suisse and the US Department of Justice (DOJ) regarding tax evasion. The settlement is expected to reach hundreds of millions of dollars and may be finalized within the week.
In 2014, Credit Suisse pleaded guilty to conspiring to help US citizens evade taxes and paid US$2.6 billion in fines. The agreement required the bank to provide updates on its efforts to close accounts and disclose the destinations of transferred funds. However, Credit Suisse’s failure to fully comply with these follow-up actions left it vulnerable to additional penalties, a Bloomberg report noted.
UBS acquired Credit Suisse in a 2023 emergency rescue and has since been addressing a backlog of legal and regulatory issues inherited from the acquisition. The Zurich-based bank has set aside $4 billion to cover litigation and related expenses. Shares of UBS, currently trading at their highest levels since 2008, remained steady following news of the potential settlement.
Bloomberg Intelligence estimates UBS’s liability for the case could total approximately $200 million. In its third-quarter report, UBS disclosed a provision for costs related to investigations into its cross-border wealth management services, including Credit Suisse’s compliance with the 2014 plea deal, though it did not specify the amount.
This settlement follows other recent legal resolutions involving UBS and Credit Suisse. In 2023, UBS settled the so-called tuna-boat scandal with Mozambique and paid $1.44 billion to resolve its own long-standing US case related to mortgage-backed securities.
Bloomberg said UBS declined requests for comments.
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