Wednesday June 24, 05:59 PM
UBS shares rise on possible end to US legal cases
ZURICH (AFP) - Shares in Swiss bank UBS (Virt-X: UBSN.VX - news) rose sharply Wednesday following a report that US authorities might abandon legal action against the lender.
UBS shares closed up 5.5 percent at 14.85 Swiss francs on the Swiss Market Index, which itself rose by 2.3 percent.
"A positive outcome for UBS in the legal procedure under way (in the United States) could help (re-establish) the bank's reputation and confidence and activate a flow of new money," said analyst Rainer Skierka of the Sarasin bank.
"But it will take some time to re-build its reputation."
UBS has come under intense scrutiny after it admitted guilt to US tax fraud in February and identified some 300 US clients suspected of fraud by the United States. It also paid a fine of 780 million dollars (556 million euros).
On Tuesday, the US Justice Department denied press reports that it might now agree to drop further legal proceedings against UBS.
US officials in the later lawsuit against UBS requested details on 52,000 more UBS clients suspected of tax fraud. The bank has so far refused to hand over the information.
The case is expected to be heard July 13 at a US federal district court in Miami.
Saddled with a loss of 20.9 billion Swiss francs (13.8 billion euros, 19.4 billion dollars) last year, UBS has also seen major capital withdrawals by clients who have lost confidence in the institution.
Withdrawals came to 85.8 billion francs in the last quarter of 2008 but were reduced to 14.9 billion in the January-March period of 2009.
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