US shareholders file class-action suit against UBS

The legal woes facing Swiss banking giant UBS faces in the United States have worsened, as a New York law firm filed a lawsuit on behalf of investors who claim the Swiss banking giant cheated them.

A securities class action lawsuit was filed in US district court in New York "on behalf of all persons or entities who purchased or otherwise acquired the publicly-traded securities of UBS AG between May 4, 2004 and January 26, 2009," the law offices of Howard Smith said in a statement.

Starting in May 2004, UBS shares rose on the Swiss stock market more than 80 per cent then plunged by roughly the same amount from its April 2007 peak to January 2009.

The complaint accuses UBS of violating US law because it failed to disclose "that its strategy to attract 'Net New Money' touted by (UBS) as a primary indicator of (its) performance and future prospects, was accomplished through a fraudulent scheme to help ultra-high net worth US investors evade federal taxes by secreting billions of dollars of their funds in 'undeclared' Swiss bank accounts."

The law office "encourages investors with losses in excess of one million dollars on their UBS AG investments" to join the lawsuit - New Orleans Employees' Retirement System vs UBS AG before the March 31 deadline.

The case, filed on January 30, is directly related to the clash between Washington and UBS over the limits of bank secrecy and tax avoidance.

The US government is currently suing UBS to seek details on 52,000 American clients suspected of tax fraud.

The bank in February handed over details on some 300 US clients, but is refusing to hand over information on the other customers.

Under a settlement with the US Justice Department, UBS last month admitted to tax fraud by inviting rich US clients to open accounts in Switzerland and so avoiding declaring their income to the US Internal Revenue Service.

It paid $780 million (€571 million) to settle the case.