US Court Postpones UBS Trial

Dorothy Dahm

Swiss bank's interests clashes with US government.

Yesterday, a federal court judge in Miami approved in a delay in the UBS AG's trial. Believing affluent Americans have been using the Swiss bank to evade taxes, Us tax officials have ordered the bank to surrender documents implicating 52,000 people in tax evasion. Government officials believe these individuals are concealing $20 billion in undeclared Swiss accounts. The ground-breaking case represents a clash between American and Swiss financial law in an increasingly global economy.

Judge Alan Gold of the US District Court for the Southern District of Florida also indicated that he would be amenable to further extensions at both parties' request.

Because the US Justice Department and UBS are engaged in talks aiming at out-of-court settlement, both parties requested that the federal court postpone the trial. This case represents a conflict of interest for the Swiss bank: Swiss law prohibits financial institution from sharing information with government authorities. UBS hope to find a way of transferring client data without breaking Swiss law.

Some experts believe UBS may face a significant financial penalty. Earlier this year, the Swiss bank agreed to pay $780 million and revealed the names of about 250 clients in a similar case. European governments are also attempting to recoup lost funds from the bank.

The trial will take place on August 3. Judge Gold also scheduled a telephone conference for July 29, when the two parties will announce whether they will proceed with the trial or settle out of court.