Big banks a such an easy target these days. Everyone in hates them and politicians love that because they can extract big fines. win-win-win. Until all the banks go under at least - US banks are mostly solvent still, European ones look like all the big ones will go under.
UBS Is Fined $4.2B in French Tax-Evasion Case
11–20 of 73 posts
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#12I wonder if they will rethink their "fat billboards at Beijing airport" marketing strategy. Who wouldn't love to see China fine a Swiss bank?
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#13Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up…
It was 4.2 billion not million, it probably should have been more, but that's definitely not a slap on the wrist.
It's literally nothing to the top brass.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#14We are shifting more and more towards a legal system where not only those who actually did something wrong (here the tax evaders), but also those whose services have been used to do so are considered guilty. Another example is copyright, where websites are increasingly held liable for user uploads. I'm not convinced that this is a good development.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#15We are shifting more and more towards a legal system where not only those who actually did something wrong (here the tax evaders), but also those whose services have been used to do so are considered guilty. Another example is copyright, where websites are increasingly held liable for user uploads. I'm not convinced that this is a good development.
If a stranger walks up to you, and gives you $10,000 to drive a large, heavy, body-sized bag to the outskirts of town, and dump it in a river, I think most reasonable people would consider you to be at least an accessory to murder. On the other hand, if you were a department store clerk who sold that bag, most reasonable people would consider you in the clear.
There's a spectrum for this sort of thing, and I think UBS was clearly on the 'knowingly profiting from crime' side of it.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#16Does anyone know what the likelyhood of the 4.2B being paid out is? I imagine that UBS will go through all possible appeals processes. Also if the article is right in that this was affected by the protests, then that is a big win for protesting.
UBS's market cap is $46B. After this was announced, their stock fell 4%. This drop, if permanent, would equate to a loss of ~$1.84B in market cap. There are many factors that could be influencing price, but if we attribute this 4% delta entirely to the announcement, the market is guessing the actual penalty will amount to $1.84B. This could be bc the market thinks UBS can appeal with a 50% success rate, or can negoti…
It seems like your back-of-the-envelope estimate is assuming that the market values UBS at exactly its assets minus its liabilities. This disregards goodwill, which (someone correct me if I'm wrong) includes expectations of future earnings. That number wouldn't even be affected in a straightforward way since banks, especially European banks, tend to be levered quite a bit in order to survive on interest income.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#17We are shifting more and more towards a legal system where not only those who actually did something wrong (here the tax evaders), but also those whose services have been used to do so are considered guilty. Another example is copyright, where websites are increasingly held liable for user uploads. I'm not convinced that this is a good development.
You're exaggerating. Due diligence is a thing in most professional services. Banks have been complicit in money laundering and tax evasion for decades and they have shown that they have little interest in solving these issues.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#18Another slap on the wrist. No one goes to jail because of Deferred Prosecution Agreements HSBC got fined about half that when they caught laundering money for the Mexican cartels a few years back. True story: HSBC had to design special teller windows because the standard ones were too small to fit the sacks of money that were being brought in and laundered. If you want to know why these guys don't go to jail, pull up…
It was 4.2 billion not million, it probably should have been more, but that's definitely not a slap on the wrist.
Right. For context, that's around 9% if their $48 billion market cap. Much worse than sending any one person to jail.
Also: in the US, I've heard the "value of saving a life" for some decision calculations to be assumed at ten million dollars. That's $200k per year for 50 years. (In New Zealand, from talking to some civil engineers, it is a lot lower.)
At the American price, the fine is worth 420 human lives.
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#19Earlier quoted context omitted.
UBS's market cap is $46B. After this was announced, their stock fell 4%. This drop, if permanent, would equate to a loss of ~$1.84B in market cap. There are many factors that could be influencing price, but if we attribute this 4% delta entirely to the announcement, the market is guessing the actual penalty will amount to $1.84B. This could be bc the market thinks UBS can appeal with a 50% success rate, or can negoti…
This isn't quite right -- The 4% loss could just represent the delta between what was already priced in and the actual loss. This case has been a long time coming so the expectation of the penalty should have been priced in long ago. Secondly, and it depends on the jurisdiction, but penalties and fees associated with wrongdoing generally aren't tax deductible. The US clarified this during the TCJA but most countries…
There's also that weirdness of financial companies having price-to-book less than one... (For UBS it's around 0.9. Don't ask me how it makes sense.)
Re: UBS Is Fined $4.2B in French Tax-Evasion Case
#20We are shifting more and more towards a legal system where not only those who actually did something wrong (here the tax evaders), but also those whose services have been used to do so are considered guilty. Another example is copyright, where websites are increasingly held liable for user uploads. I'm not convinced that this is a good development.
You're exaggerating. Due diligence is a thing in most professional services. Banks have been complicit in money laundering and tax evasion for decades and they have shown that they have little interest in solving these issues.
Software Developers have been complicit in copyright infringement for decades and they have shown that they have little interest in solving these issues.
Just like bits have no color for you[1] dollars had no color for bankers for a long time. Stopping money laundering in your organization is just as much pain as stopping copyright infringement on your system.