The United States government is pressuring UBS once again — but this time the target is UBS top executives. During a senate subcommittee hearing yesterday, the US Justice Department indicated that they may seek prosecution of top UBS executives. But will the Justice Department follow through on this, or is it just a tactic designed to put pressure on UBS to turn over more account information?
The Justice Department’s tax division acting assistant attorney general, John DiCicco, has said that he would not, “rule out one way or the other whether there will be prosecutions.”
Given the potential consequences to UBS, and even Switzerland, of disclosing more account information, the threat of prosecuting UBS executives could just be a measure designed to pressure UBS into more disclosure.
UBS is resisting more disclosure because of the interference of Swiss banking traditions and stability and the potential threat of losing clients en masse as a result. This could all deliver a big blow to the Swiss banking industry, and Switzerland may not have the resources to shore up banks like other countries have.
So, if the threat of UBS executive prosecution is just that, a threat, is it enough to force UBS into more disclosure?