UBS Group AG is coming under renewed US pressure over Credit Suisse’s handling of Nazi-Linked accounts

UBS Group AG is coming under renewed US pressure over Credit Suisse’s handling of Nazi-Linked accounts, with the Senate Judiciary Committee demanding new responses from the Swiss lender’s management to dozens of questions as part of its investigation.
 

UBS’s previous responses “did not fully address this Committee’s questions,” Senator Charles Grassley said in a July 17 letter to the bank. UBS declined to comment on Senator Grassley’s letter, which hasn’t previously been disclosed. The bank is currently working on a response, according to a person familiar with its planning.

The back-and-forth is the latest flashpoint in a tense year between the bank and the committee, which has called on UBS to ensure a complete and transparent investigation of the handling of Nazi-linked accounts by Credit Suisse. UBS bought its troubled rival out of near collapse in 2023, acquiring all its legal liabilities in the process.

Senators criticized UBS at a hearing in February, but the bank has pushed to end a six-year-old probe at the end of this year and limit its scope, criticizing the independent ombudsman overseeing it as biased.

The bank has argued that a settlement reached with Jewish groups in the 1990s under which it paid $1.25 billion to Holocaust victims covers all potential exposure from its ties to its handling of Nazi-related accounts, saying the current probe is purely aimed at completing the historical record.

But those groups, backed by the Senate panel, have argued that the investigation is revealing new information potentially not covered by the 1990s settlement. The latest probe began after records emerged showing Credit Suisse serviced accounts for Nazis and related entities, including the so-called Rat Lines through which they escaped to Argentina after World War II.

Grassley who chairs the committee, remains committed to ensuring a thorough investigation of Nazi-linked accounts at Credit Suisse and continues to call on UBS to fully cooperate and produce the records requested by the ombudsman, according to a committee official.

The Republican senator from Iowa plans to hold another hearing on the issues, although he hasn’t set a date, and wants to create a historical repository of Credit Suisse records linked to the Nazi accounts. He included a list of 62 questions for the bank to answer in his July letter.

In May, Neil Barofsky, the ombudsman overseeing the investigation, wrote to the committee, accusing UBS 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” and withholding records from the probe.

UBS fired back with a public statement saying it rejects Barofsky’s narrative as lacking objectivity. The bank turned down his appeal for more time, saying he should complete his report by the end of the year.

The Senate Committee and Barofsky last month gained an ally in Helen Junz, an economist and respected former member of the Volcker and Bergier Commissions, which led the the original 1990s-era investigation into the Swiss banks’ Nazi past.

In a five-page letter to the committee chairmen on Aug. 6, she criticized UBS’s response for taking an overly broad view of the terms of that 1998 settlement, which the bank argues covers any potential future exposure.

The suggestion that any actively concealed Nazi-linked assets would be covered in the settlement is “inconsistent with, and violative of, the principles of good-faith that are the bargained-for core” of that settlement, she wrote. “The bank’s response — in fact non-response — is part and parcel of a long-established pattern of Credit Suisse’s stonewalling any and all investigations into these matters.”

“This pattern appears now to have been embraced by UBS after the merger with Credit Suisse with regard to the legitimate demands for access to records that reveal the Swiss banks’ links to Nazi entities,” she wrote.

UBS says it has spent more than $100 million financing Barofsky’s team of investigators and shared more than 19 million documents with them. The bank is willing to cooperate with inquiries it views as legitimate, but will not continue to let the investigation drag on indefinitely.