(May 22): UBS Group AG accused the US lawyer overseeing a six-year-old inquiry into Credit Suisse’s handling of Nazi-linked accounts of bias and exceeding his mandate, deepening a standoff between the Swiss bank and its critics in Washington.
“In many respects, UBS rejects the Ombudsperson’s narrative,” the bank said in a website statement as it released new responses to a Senate committee that has pushed it to be more open in the case. “All too often, his reporting reads less like an objective, accurate, and fair history written by a neutral ombudsperson and more like a biased narrative.”
The criticism is likely to raise political pressure on UBS over the issue. It follows a Senate Judiciary Committee hearing earlier this year at which lawmakers accused the bank of obstructing the investigation. Chairman Charles Grassley, an Iowa Republican, has said he may hold new hearings if the bank doesn’t cooperate more with the probe.
In a letter to UBS demanding more information from the bank last month, Grassley said the bank’s recent behaviour calls “into question UBS’s candor to the committee and its commitment to a thorough investigation.”
UBS defended its cooperation, saying it’s provided more than 48 million pages of documents and spent more than US$250 million on the probes, including more than US$100 million paid to the ombudsperson’s law firm since 2021.
Credit Suisse hired Neil Barofsky, a prominent Washington attorney, to oversee the inquiry in 2021 but fired him a year later as his investigation expanded. After pressure from the Senate, UBS, which took over Credit Suisse in 2023, rehired him later that year.
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Yet as the investigation dragged on, the bank late last year began to object to his requests for additional materials. Barofsky defended his approach and accused the bank of trying to impose undue limits on the inquiry.
Barofsky didn’t immediately respond to a request for comment on Thursday.
In a letter to Senator Grassley dated May 20, he accused the bank of making “false and misleading statements” related to “previously unreported examples of Credit Suisse executing forced transfers of Jewish clients’ assets into the accounts of Nazi-affiliated banks.”
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A spokesperson for the Senate Judiciary Committee said, “the committee is closely reviewing UBS’s responses and will continue to conduct its legitimate oversight to ensure accurate testimony and a conclusive investigation that fulfills the demands of history.”
In its statement, UBS said it’s determined to conclude the investigation promptly and decided that Barofsky’s final report should be delivered by the end of the year, as it declined his request for a further extension.
UBS accused Barofsky of overreaching in his mandate and for failing to recognise that the terms of his engagement do not allow him automatic access to privileged documents in the case.
“His role is not that of a prosecutor or government-appointed monitor,” and he “is not entitled to interpret his mandate any way he pleases or to make threats, veiled or otherwise, in order to impose his view or interest,” the bank said.
But Barofsky has argued that he has broad authority to oversee the probe. “UBS committed in my engagement letter to provide me with unfettered access to all materials, subject only to restrictions required by law,” he wrote in a letter to the Senate committee last month.
In his May 20 letter, Barofsky told the committee that the bank was withholding more than 27,000 pages of documents because it says they are legally privileged. Until he sees those, Barofsky has said, he cannot consider his investigation complete.
UBS said last month that it wouldn’t hand over the stash of 1990s-era privileged documents for the investigation into the handling of Nazi-linked accounts after failing to win assurances from a US court that doing so wouldn’t expose it to new financial claims. The bank argued that a US$1.25 billion 1990s settlement over Swiss banks’ actions during the Holocaust covered any potential future exposure.
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“UBS’s voluntary sharing of certain privileged material does not relinquish UBS’s contractual right to assert privilege when warranted,” the bank said in its detailed 46-page response.
“Had the court issued the clarifying order UBS requested, its practical effect would have been to facilitate UBS providing the Ombudsperson with any relevant, privileged Holocaust litigation-related documents,” it said.
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