UBS executives to repay over $58 million of bonuses; bank admits some fraud

28 November 2008

Some of the current and former top executives of Swiss banking group UBS Corp, one of the hardest-hit in the subprime loan crisis, would give back or forgo up to SFr70 million ($58 million) in bonuses after steering Switzerland's flagship bank into heavy losses.

UBS also said it has uncovered a few cases of tax fraud as part of a US inquiry into whether it helped wealthy Americans dodge taxes through accounts in Switzerland.

"Our investigations have uncovered a limited number of cases of tax fraud under both US and Swiss law," chairman Peter Kurer told shareholders at a meeting convened to vote on SFr 6 billion convertible bond issue to the Swiss government.

UBS, which reported a modest third-quarter profit, mainly on its tax gains and accounting changes, hopes to make a profit in 2009 despite the stressed market conditions.

UBS executives collected the big pay packets and fat bonuses in the height of the credit boom that eventually led to the subprime crisis and the collapse of the financial system itself.

A week after Peter Wuffli, former chief executive of UBS, agreed to renounce SFr12 million, Marcel Ospel, who was chairman of the Swiss bank until last April, and two of his colleagues agreed to forgo SFr33 million ($27.8 million).