The Swiss government has been in talks for more than a year with U.S. authorities, who, after obtaining data on about 4,700 UBS clients, are now investigating 11 other firms, including Zurich-based Credit Suisse and Julius Baer Group Ltd., for alleged assistance in U.S. tax evasion.
Credit Suisse continues to "work hard" to resolve the probe, CEO Brady Dougan said in an interview April 25. Julius Baer exited its U.S. private-client business between 2009 and 2011, said Jan Vonder Muehll, a bank spokesman in Zurich.
Wegelin Forfeiture
Wegelin & Co., a Swiss private bank established in 1741, became the first Swiss lender to face criminal charges in the U.S. crackdown on offshore firms suspected of abetting tax evasion. It had to sell its assets in January to Switzerland's Raiffeisen Group to save its non-U.S. business before the U.S. indicted the firm in February. The St. Gallen-based private bank helped Americans hide more than $1.2 billion in assets and evade taxes, wooing clients spurned by UBS, according to an indictment filed in federal court in New York.
U.S. District Judge Laura Taylor Swain ordered Wegelin to forfeit $16 million on April 24, allowing the U.S. government to take the amount from Wegelin's U.S. account, held at UBS in Stamford, Connecticut. Albena Bjoerck, a spokeswoman for Wegelin, declined to comment.
Spokesmen for Citigroup, Bank of America, Morgan Stanley, Goldman Sachs and JPMorgan all declined to comment on how Fatca is affecting their business, with some citing company policies not to discuss government regulation. Standard Chartered Plc, France's Societe Generale SA, Barclays Plc and Hong Kong-based Hang Seng Bank Ltd., which all have wealth-management businesses, also declined to comment.
'Pain for Americans'
The restrictions on products available to Americans may not matter to a savvy investor, according to Hugh Young, who helps manage $70 billion in Asian equities in Singapore for Aberdeen Asset Management Plc.
"The financial institutions can restrict you from some of the best products, but you have others of the best," he said.
Still, the limitations create complications that act as an investment deterrent, said Philip Marcovici, a retired U.S. tax lawyer who advises wealthy families and governments.
"It's a pain for Americans to invest in markets outside of the U.S.," he said.