U.S. markets closed
  • S&P 500

    +11.90 (+0.34%)
  • Dow 30

    -28.09 (-0.10%)
  • Nasdaq

    +42.28 (+0.37%)
  • Russell 2000

    +10.25 (+0.63%)
  • Crude Oil

    -0.86 (-2.12%)
  • Gold

    -1.20 (-0.06%)
  • Silver

    -0.01 (-0.04%)

    +0.0042 (+0.36%)
  • 10-Yr Bond

    -0.0070 (-0.83%)

    -0.0042 (-0.32%)

    -0.1200 (-0.11%)

    -358.83 (-2.70%)
  • CMC Crypto 200

    -1.40 (-0.54%)
  • FTSE 100

    +74.63 (+1.29%)
  • Nikkei 225

    +42.32 (+0.18%)

UBS Group to Face $93M Penalty for German Tax Evasion Case

Zacks Equity Research

UBS Group’s UBS German unit is likely to face a fine of about €83 million ($93 million) for allegedly helping clients evade taxes in the period between 2001 and 2012. The prosecutors have forwarded request for fine in a local court in Mannheim.

The prosecutors are of the opinion that managers of the Swiss bank, with support from executives at the Swiss parent,were involved in wrongdoings by showing cross-border bank transfers as if they were made within Germany.

Investigations on the matter were being conducted since 2012, and during the period prosecutors have raided offices and homes of bank employees, per a Bloomberg’s article.

In a recent release, prosecutors said that they have strong evidence against UBS and that it was sufficient to fine the bank for wrongdoing by its executives. However, the firm has chosen to fight these allegations.

UBS said, "The prosecutor's office in Mannheim has been investigating the alleged conduct from before 2012 for six years. We do not believe the prosecutor's claim is supported by the facts or the law and we intend to vigorously oppose this administrative proceeding."

In another major legal setback, UBS’ French unit was found guilty of similar charges. The court penalized the bank €4.5 billion ($5.1 billion), including civil damages of €800 million.

In this case too, UBS persistently denied any criminal wrongdoing throughout the investigation and during the trial, and therefore, has contested the verdict and plans to appeal.

Our Take

Heightened investigations and lawsuits surrounding tax evasions reflect efforts of the regulators and the government to bring transparency and stability in the trading industry and thereby, safeguard investors’ interests.

Though, UBS undertakes cost cutting measures, which will aid bottom-line growth, persistent negative interest rate environment in the domestic economy and constant legal hassles pose as headwinds.

In three months’ time, UBS has lost 3.7% on the NYSE against 1.1% growth recorded by the industry.

The company currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the same space are The Bank of N.T. Butterfield & Son Limited NTB, ICICI Bank Limited IBN and Banco Latinoamericano de Comercio Exterior, S.A. BLX. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Bank of N.T. Butterfield has been raised 7.4% for the current year in the past 30 days. The company’s share price has jumped 11.7% in the past three months.

ICICI Bank’s earnings estimates for 2019 have remained stable in the past 30 days. Its share price has risen 12.7% in the past three months.

Banco Latinoamericano’s shares have gained 13.9% in three months’ time. Its earnings estimates for 2019 have moved up 3.4% in the past 60 days.

Breakout Biotech Stocks with Triple-Digit Profit Potential

The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.

Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.

See these 7 breakthrough stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
ICICI Bank Limited (IBN) : Free Stock Analysis Report
UBS Group AG (UBS) : Free Stock Analysis Report
Banco Latinoamericano de Comercio Exterior, S.A. (BLX) : Free Stock Analysis Report
Bank of N.T. Butterfield & Son Limited (The) (NTB) : Free Stock Analysis Report
To read this article on Zacks.com click here.