Raoul Weil was formerly a Swiss banker who served as chief executive of the Swiss private bank Reuss Private Group. He also served as the former chairman and chief executive officer of Global Wealth Management & Business Banking at UBS AG. Weil was indicted by the U.S. Justice Department for aiding and abetting tax evasion by thousands of UBS clients who were U.S. citizens. He was arrested in October 2013 during a trip to Italy and has been extradited to the United States. Raoul was charged with tax fraud before and had been previously released on $10.5 million bail.
Raoul Weil, 54, will enter a plea of not guilty according to his lawyer when they appear in Fort Lauderdale, Florida. He stands to face at least five years in prison. Bloomberg News reported that he is accused of conspiring with senior executives at UBS, employees who ran the cross-border business, bankers who serviced U.S. clients and the clients. If Weil cooperates with prosecutors, there is a possibility a judge will give him a shorter sentence. The situation looks bad objectively, as regulation after regulation is passed to curtail the activities of the risk takers in the markets. Also, laws that favored risk taking are being reviewed with narrower scrutiny, especially as the public outcry- the occupy rallyers across the nation have made their voices significantly heard. I used to believe that the court would ignore the hordes crying for “justice”- but with the tightening of the risk taking abilities of banks and other financial institutions, as well as the continued prosecution of those who either mismanaged, defrauded, or otherwise engaged in insider trades or securities fraud- it seems that the courts are the hounds of justice. I do not favor a risk averse financial system, but there is no doubt that a certain amount of over-leverage has a tendency towards destabilization. That being the case, internal control laws are being beefed up, capital holdings need to be shored up at credit union and other lending houses, and proprietary trading is a thing of the past. The SEC will continue to increase its oversight capacities as it makes sure that these types of securities frauds and schemes do not grossly defraud the public.
At Raoul Weil’s hearing, Mark Daly, a Justice Department trial attorney, told the judge that this was a “ pyramid conspiracy involving the executives, managers, bankers at UBS and the customers.” Weil has been placed under house arrest in an undisclosed central New Jersey location with an elderly couple and a global positioning system is monitoring his movements.
Image Credit: www.bloomberg.com