Class Action Lawsuit Accuses UBS of Wrongly Closing Secret Accounts

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On Friday, a class action lawsuit was filed against Union Bank of Switzerland (UBS AG) in California federal court alleging that the bank improperly and intentionally closed secret bank accounts belonging to the trust of an Indonesian politician.

Lead plaintiff AM Trust alleged in the class action lawsuit that UBS and its predecessors, including Swiss Banking Corp., used “deceitful and corrupt” practices to close the bank accounts from the estate of deceased Indonesian vice president, Adam Malik.

Since 1984, UBS has specifically targeted accounts that were kept secret in the Swiss bank and not often touched by their beneficiaries for closure, the UBS class action lawsuit alleges. Once closed, the bank would allegedly seize the assets in that account. The plaintiff alleges that when the beneficiaries made inquires about the wrongly closed accounts, UBS would tell the beneficiaries that UBS does not keep records after 10 years.

“When confronted by Account Holders with evidence of the accounts’ existence,” the class action lawsuit says, “the defendants would admit a banking relationship had previously existed but no records could be located due to passage of time including the date of alleged closure even though the bank records were in defendants’ possession or could be located by conducting a competent search.”

AM Trust says they are seeking to represent holders of secret bank accounts and their beneficiaries who they say lost money and accounts as a result of UBS’ “systematic, deceitful and corrupt financial practices.” According to the class action lawsuit, “In 2009 UBS AG settled a criminal case filed by the U.S. Department of Justice by paying a penalty of $780 million. UBS AG was charged with defrauding the Internal Revenue Service by facilitating tax evasion by U.S. persons through false reporting and concealment of records.”

AM Trust accuses UBS of violating international and American laws by seizing the assets of closed secret accounts. AM Trust argues that UBS and its predecessors were able to close the accounts and improperly seize the assets due to banking secrecy in Switzerland, lack of documentation regarding the accounts and the perceived notion that the account holders would likely not complain as a means of maintaining secrecy.

The UBS class action lawsuit was filed in California because “the named defendant conducts commerce within the State of California directly through local branches and financial advisors in this District and that some members of the Account Holders class reside in California and this District,” according to the complaint.

The plaintiff seeks judgment for compensatory damages, an accounting, disgorgement of profits and restitution and attorneys’ fees and costs of suit. AM Trust has also asked the court for punitive damages and the imposition of a constructive trust, the class action lawsuit says.

AM Trust is represented by Thomas Easton of the Law Office of Thomas Easton

The UBS Wrongly Closed Secret Accounts Class Action Lawsuit is AM Trust v. UBS AG, et al., Case No. 3:14-cv-04125, in the U.S. District Court for the Northern District of California.