A Paris court on Wednesday fined Swiss banking giant UBS €3.7 billion ($4.2 billion) for tax evasion and ordered it to pay an additional €800,000 in damages to the French state.
Switzerland’s largest bank was convicted of illegally soliciting wealthy French people to help them avoid paying taxes on more then €10 billions between 2004 and 2012 and laundering the proceeds.
French media reported the fine was the largest ever leveled against a bank in the country.
UBS said it would appeal the ruling, a process that drag on the case for years after repeated failed attempts to reach a settlement.
“This decision is incomprehensible. We will appeal,” UBS general counsel Markus Diethelm told reporters outside the courtroom. “We have seen no facts and no evidence.”
UBS has set aside $2.46 billion to cover potential losses from litigation and regulatory requirements. The combined fine is more than the bank’s reported 2018 net profit of $4.9 billion. Its stock plummeted nearly 5 percent on the news.
Prosecutors found that UBS sent employees to solicit wealthy clients and illegally concealed their assets in a “systematic” manner.
The bank and its directors “were perfectly aware that they were breaking French law,” prosecutors said.
The trial began last autumn after a seven-year investigation, launched after former employees came forward about the bank’s practices.
The investigation unfolded as European countries looked to crack down on tax evasion and money laundering following the 2008 financial crisis.
In similar cases, UBS reached a $780 million settlement with the United States in 2009, and in Germany it agreed to pay a €300 million fine in 2014.
More to come…
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