By Charley Brooke Barnett (Editorial Assistant)
UBS has been fined a record €3.7bn (£3.2bn) and ordered to pay €800m to the French government in a tax fraud case.
The Swiss bank has been found guilty of helping high-net-worth French clients evade tax between 2004 and 2012. Prosecutors say UBS employed an array of money laundering tactics; from targeting clients at corporate events to the use of self-erasing hard drives.
The fine is much higher than the $2.46 billion the bank has set aside to cover potential losses from litigation and regulatory requirements.
Prosecutors told the court how UBS was “systematic” in offering its support to tax-evading customers and that the laundering of proceeds from the tax fraud was done on an “industrial” scale.
In a statement reported to the BBC, UBS said it “strongly disagrees” with, and will appeal, the verdict.
“The bank has consistently contested any criminal wrongdoing in this case throughout the investigation and during the trial. The conviction is not supported by any concrete evidence, but instead is based on the unfounded allegations of former employees who were not even heard at the trial.”
History repeats itself as this is not the first time UBS has been involved in tax fraud. In the US in 2009, UBS agreed to pay $780m after admitting helping thousands of clients evade tax. In Germany in 2014, the bank was found guilty of similar charges and fined €300m.
European banks have come under pressure from regulators to tighten compliance with anti-money laundering rules since the financial crisis and will scrutinise the ruling, analysts say.
Shares in the Swiss bank fell by as much as 3.2 percent after the ruling on Wednesday.