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| Sub-prime woes force UBS changes | |
| (about 7 hours later) | |
| UBS has overhauled its management structure as it tries to recover from losses linked to the sub-prime crisis. | |
| The Swiss bank, which has been the biggest European casualty of the credit crunch, is devolving many of the chairman's duties and responsibilities. | |
| Four of UBS's 12 board members will step down in the firm's second shake-up since last October. | |
| But the move failed to reassure investors, with shares falling as much as 6.3% to a 10-year low. | |
| The Swiss bank's reputation for financial prudence has been recently damaged by the sub-prime crisis which has seen it make losses of more than $37bn (£18.6bn). | |
| The firm made an $11bn loss in the first three months of 2008 and it is the process of cutting 5,500 jobs. | |
| Analysts said that there has been a large amount of market speculation that UBS will announce more writedowns for the second quarter. | |
| Tax probe | |
| The recommendations for the restructuring came from the bank's governance committee - and included a clear separation of the responsibilities of the board of directors and executive management. | |
| Key shareholder Olivant had been critical of the chairman's office - currently held by Peter Kurer, for having too much influence over executive management. | |
| Mr Kurer said that "bringing UBS back to its leading position" was "the number one priority". | |
| The move came as it emerged that US authorities had stepped up a probe into allegations that offshore accounts were set up at UBS to help wealthy clients avoid tax. | |
| The Justice Department is seeking court approval for the Internal Revenue Service (IRS) to issue a civil summons against UBS to obtain key information. | The Justice Department is seeking court approval for the Internal Revenue Service (IRS) to issue a civil summons against UBS to obtain key information. |
| A former UBS banker admitted last month to conspiring to help US clients avoid paying tax. | A former UBS banker admitted last month to conspiring to help US clients avoid paying tax. |
| UBS said it took the matter "very seriously" and was co-operating fully. | UBS said it took the matter "very seriously" and was co-operating fully. |
| 'Diligence' | 'Diligence' |
| UBS said it was "aware" of the summons request, made to the Federal District Court in the Southern District of Florida. | UBS said it was "aware" of the summons request, made to the Federal District Court in the Southern District of Florida. |
| "UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental co-operation and assistance," it said in a statement. | "UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental co-operation and assistance," it said in a statement. |
| Swiss officials held talks with their US counterparts about the allegations last week. | Swiss officials held talks with their US counterparts about the allegations last week. |
| This followed the admission by Bradley Birkenfeld, a former director of UBS private banking division, that he helped US clients avoid paying more than $7m in tax by hiding more $200m in an elaborate web of fraud. | This followed the admission by Bradley Birkenfeld, a former director of UBS private banking division, that he helped US clients avoid paying more than $7m in tax by hiding more $200m in an elaborate web of fraud. |
| According to the Justice Department, Mr Birkenfeld claimed more than $20bn was sitting in "undeclared" accounts at the Swiss bank controlled by US taxpayers. | According to the Justice Department, Mr Birkenfeld claimed more than $20bn was sitting in "undeclared" accounts at the Swiss bank controlled by US taxpayers. |
| Media reports have suggested that up to 20,000 US citizens may be involved. | Media reports have suggested that up to 20,000 US citizens may be involved. |
| The IRS said its probe would enable it to "detect wealthy individuals who don't pay their taxes as well as provide details about how advisers facilitate this abuse". | The IRS said its probe would enable it to "detect wealthy individuals who don't pay their taxes as well as provide details about how advisers facilitate this abuse". |