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HomeFinanceFrench magistrates propose $6.1 billion fine for UBS: source- Reuters

French magistrates propose $6.1 billion fine for UBS: source- Reuters

PARIS (Reuters) – French investigating magistrates have proposed that UBS AG UBSN.VX pay a fine of 4.88 billion euros ($6.16 billion) in an investigation into whether the Swiss bank helped wealthy French individuals dodge tax, according to a judicial source.

The proceedings are still at an investigation stage. The proposals were made to an investigating judge who will decide whether there is a case against the bank.

According to the source, the magistrates based their calculations on a total 12.2 billion euros they claimed was held by UBS on behalf of French individuals.

They then assumed that 80 percent of that sum – some 9.76 billion euros – was fraudulent money, and decided the fine should amount to half of that sum – 4.88 billion euros, according to the source.

The Paris prosecutor’s office on Friday declined to comment on the figures provided by the source.

A UBS spokesman referred Reuters to a statement it had issued earlier on Friday in reaction to a Swiss press report on the subject. That report said a fine could reach up to $6.3 billion.

“As we have said previously, the base for any calculations in this matter are completely artificial, speculative and not based on facts,” the statement said.

“This matter is currently still in the stage of a formal investigation and we will continue to defend ourselves strongly.”

The Zurich-based bank was put under formal investigation by French prosecutors in July after allegations it laundered the proceeds of tax evasion by French citizens.

Investigators demanded a 1.1 billion euro guarantee to cover potential fines. UBS has appealed this payment, saying the demand was “without legal basis”.

“We continue to believe that this is a highly politicized process that from the beginning of the investigation has not followed elementary facets of the rule of law,” it said in September.

UBS has also said it will go to the French Supreme Court and challenge the judicial process at the European Court of Human Rights.

The French case is one of several legal problems the bank is facing. It hiked its provisions against future litigation to 1.98 billion Swiss francs ($2.07 billion) earlier this year but warned this might still not be enough to cover possible fines and charges.

UBS shares were down 0.8 percent at 16.13 euros on Friday.

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