UBS: Bargaining to avoid an indictment
“Swiss banking giant UBS and the U.S. government are trying to thrash out a last-minute deal” to settle a landmark tax-evasion case that was scheduled to go to court this week, said Simon Kennedy in Marketwatch.com. The U.S. is demanding that UBS cough up the names of 52,000 American clients who might have opened accounts at UBS to evade U.S. taxes. “The Swiss government and UBS have both said that revealing the names would breach Swiss law.” In a separate case, UBS in June disclosed the names of about 250 clients and paid $780 million to avoid a U.S. criminal indictment.
The U.S. is again raising the threat of indictment—a virtual death sentence for a financial company—to force concessions out of UBS, said Carrick Mollenkamp in The Wall Street Journal. “But the potential settlement plans could stop short of achieving everything the Internal Revenue Service had sought.” Rather than part with all 52,000 names, the Swiss might offer about 7,000 “accounts tied to offshore companies and trusts, which are more susceptible to fraud.”
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
Publishing: BusinessWeek goes on the block
McGraw-Hill Cos., publisher of BusinessWeek, has hired investment bank Evercore Partners to explore the sale of the magazine, said Serena Saitto and Greg Bensinger in Bloomberg.com. With about 190 editorial employees and 4.8 million readers in 140 countries, BusinessWeek “was overhauled in 2007, and added stories on new products and personal finance in an effort to attract more readers and advertisers.” But ad sales at the 80-year-old magazine fell 30 percent, to $43.9 million, in this year’s second quarter.
Finance: CIT seeks a bailout
CIT Group, a leading lender to small businesses, was in urgent talks this week with creditors and banking authorities to fend off a bankruptcy filing, said Jeffrey McCracken and Serena Ng in The Wall Street Journal. Accustomed to using short-term debt to fund its lending, the firm has struggled for liquidity as the short-term debt market has dried up. Its bid to sell government-guaranteed bonds “has been stuck for months in a bureaucratic tangle.” A bankruptcy filing “could affect thousands of small-business borrowers.”
New media: Young analyst causes a stir
A research report by a 15-year-old intern at Morgan Stanley’s London office “has generated a flurry of interest from media executives and investors,” said Julia Kollewe in the London Guardian. Matthew Robson’s report on teens’ use of social media says flatly that “teenagers do not use Twitter” and that they regard online advertising as “extremely annoying and pointless.” The report has led some prominent media investors to question the business model for such social-networking sites as Facebook and Twitter, which rely heavily on advertising.
Sports: Mutiny on the women’s golf tour
Facing a player rebellion and defections by leading sponsors, the Ladies Professional Golf Association has replaced its commissioner, said Anne Szeker in SportsIllustrated.com. The tour has lost seven tournaments since 2007, and many players have complained that “problems couldn’t all be blamed on the poor economy.” Carolyn Bivens, LPGA commissioner since 2005, alienated sponsors by refusing to renegotiate their financial commitments, and angered foreign players with her demand, later withdrawn, that they learn English. Retired Rear Adm. Marsha Evans was named acting commissioner.
