UBS will disclose names, to pay fine

Bloomberg

The Justice Department accused UBS of conspiring to defraud the U.S. by helping 17,000 Americans hide accounts from the Internal Revenue Service. The U.S. will drop the charge in 18 months if the bank reforms its practices, helps prosecutors and makes payments. UBS will immediately turn over names of about 250 clients, according to people familiar with the matter.

By gaining those names, the U.S. will pierce the veil of Swiss bank secrecy. The IRS, which has sought the names of all U.S. account holders since July, has met resistance from the Swiss government. The final number of account holders Zurich-based UBS must disclose will hinge on future legal battles, according to the agreement.

"UBS sincerely regrets the compliance failures," Chairman Peter Kurer, 59, said in a statement after the accord was unsealed Wednesday in federal court in Fort Lauderdale, Florida. "Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused the confidentiality protections."

Unregistered dealer

The Securities and Exchange Commission also reached an agreement to resolve claims that UBS acted as an unregistered broker-dealer and investment adviser to U.S. citizens who held accounts directly or in the names of others.