A group of activists is urging the U.S. Department of Labor to revoke UBS’s exemption from regulations that currently allows the Swiss bank to operate in the American pension market. This comes on the heels of the bank’s history of violations and hefty penalties.
According to a report by Sueddeutsche Zeitung, the Department of Labor is reviewing UBS’s application to extend its exemption, which is crucial for the bank to continue managing assets in the massive $30 trillion U.S. pension market. However, under U.S. law, banks with criminal convictions or regulatory punishments are typically barred from handling the pension assets of American workers.
Activists are spotlighting UBS’s troubling track record, which includes paying around $20 billion in fines for nearly 100 violations from 2000 to 2023. They argue that the bank’s actions highlight a systemic issue within the banking industry, where significant penalties do not seem to deter misconduct.
UBS representatives claim that the issues stemmed from the actions of individual employees rather than systemic failures within the organization. The bank has submitted a detailed 500-page application to renew its exemption, which expired in June.
James Henry, a prominent figure from the Tax Justice Network, criticized the banking system, stating, “Criminal transactions can be appealing because they yield higher profits than the penalties incurred, and those responsible often escape serious consequences.” He emphasized the need for accountability within the financial sector.
UBS’s legal woes include a notable conviction in France for assisting wealthy clients in tax evasion, which led to a hefty €4.5 billion ($4.9 billion) fine—later reduced on appeal. The bank was also part of a group that agreed to pay $46 million in June to settle an ongoing antitrust lawsuit alleging collusion in the interest rate swap market. Additionally, UBS has inherited various legal challenges following its emergency takeover of Credit Suisse last year.
As the Department of Labor weighs its decision, the pressure mounts on UBS to demonstrate that it can operate responsibly in the U.S. market.
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