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US judge turns up the heat in UBS disclosure case
09.07.09
A Miami judge last night dramatically upped the ante in the bitter fight between the Swiss and US governments over the Obama administration's demands on UBS to reveal private details of customers suspected of evading taxes.
Just hours after the Swiss government vowed to forbid UBS from handing over such confidential details, US district judge Alan Gold, who is to preside over a hearing next week on the issue, demanded to know if the US was prepared to close UBS's American operations if the court found in its favour.
Such dramatic action could be the result of a court hearing if UBS failed to comply with any ruling forcing it to disclose, he said.
Gold's point puts the US in a tricky position, as a UBS collapse would trigger thousands of redundancies.
Analysts compared it with the criticism the US government faced in 2002 over the collapse — post-Enron — of accounting firm Arthur Andersen. That saw thousands of layoffs and was arguably caused by the government playing hardball with the firm over its auditing of the energy trading giant. Andersen had refused to reach a settlement and instead surrendered its licence to carry out audits after being found guilty on one criminal charge.
