UBS Bank Agrees to Pay $780M to SEC
National News
The second largest bank in Europe, UBS AG, has agreed to pay $780 million to settle SEC charges of unethical investment practices that allowed clients to avoid taxes through offshore accounts.
The Securities and Exchange Commission brought charges against UBS on Wednesday citing the firm for operating unregistered as a broker-dealer and investment adviser. The final amount of the settlement includes $500 million in disgorgement and tax related payments UBS is ordered to pay in connection with a related criminal investigation conducted by the Department of Justice.
As alleged by the SEC in its complaint, UBS from at least 1999 through 2008 has unlawfully acted as a broker-dealer and investment advisor to approximately 14,000 U.S clients. UBS's clientele also included offshore entities with U.S citizens as the beneficial owners. According to the SEC, UBS, through is illegal and unethical practices, has enabled its clients to avoid paying taxes on assets associated with undisclosed offshore accounts. UBS held billions of dollars worth of assets for these clients, generating revenues of $120 million to $140 million per year.
The Swiss company conducted cross boarder business primarily through unregistered client advisors who allegedly travelled to the U.S. carrying encrypted laptop computers that they used to provide clients with account related information and to communicate orders and transactions to UBS's Swiss headquarters.
The SEC alleges that UBS was aware that it was required to be registered but went the extra mile to conceal its use of U.S. jurisdictional means to provide securities services.
The advisors were allegedly trained on how to avoid being detected by U.S. authorities. During the trips, which took place two to three times per year, advisors would go to art shows, yachting events, and sporting events with clients or prospective clients, all funded by UBS, says the SEC. The SEC's is continuing its investigation into UBS's violations of securities laws
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.