UBS Group to Pay $511M to Settle Credit Suisse Tax Evasion Case

UBS Group AG UBS agreed to pay $511 million to resolve a tax probe by the U.S. Department of Justice (“DOJ”) against Credit Suisse for preparing false income tax returns and tax evasion. UBS Group AG acquired Credit Suisse in 2023.More on UBS's Tax Probe Settlement The two-year investigation by the DOJ, initiated before UBS acquired Credit Suisse, found that Credit Suisse aided and assisted in tax evasion through its 475 offshore accounts, in the preparation of false tax returns to conceal more than $4 billion from the US Internal Revenue Service (IRS). The United States DOJ reported that most of this misconduct occurred between 2014 and June 2023.The company was found guilty and liable to pay $371.9 million as part of the settlement. Additionally, Credit Suisse AG entered into a non-prosecution agreement related to undeclared U.S.-linked accounts in its Singapore unit, which held more than $2 billion in assets from 2014 to 2023, and agreed to pay an additional  $138.7 million.UBS has agreed to the probe settlement as part of its inherited legal liabilities from Credit Suisse and will record the charge in its second-quarter 2025 results, while aiming to reduce the future legal cost reserves related to Credit Suisse.UBS Recent Developments in Credit Suisse Integration PlanUBS is facing challenges and legal claims post its acquisition of Credit Suisse, which is increasing its costs. Nonetheless, UBS is on track to substantially complete the integration of Credit Suisse by the end of 2026. The company is also on track to achieve the targeted cost reductions.In the first quarter of 2025, UBS completed consolidating its branch network in Switzerland, merging 95 branches since the July 2024 merger with Credit Suisse. The company is initiating its Swiss business migrations, with the first major wave planned for the second quarter of 2025, and aims to complete the migrations by the first quarter of 2026.Further, in the first quarter of 2025, UBS realized an additional $0.9 billion in gross cost savings. Cumulative gross cost savings at the end of the first quarter of 2025 amounted to $8.4 billion compared with the 2022 combined cost base of UBS and Credit Suisse. This represents around 65% of its ambition to deliver $13 billion in annualized exit rate gross cost savings by the end of 2026.Legal Issues Faced by Other Finance FirmsIn March 2025, Robinhood Markets Inc. HOOD agreed that its units — Robinhood Financial and Robinhood Securities — would pay $26 million to settle Financial Industry Regulatory Authority (“FINRA”) allegations for failing to respond to red flags about potential misconduct and not verifying the identities of thousands of customers.FINRA found that Robinhood Financial of HOOD provided customers with inaccurate or incomplete disclosures regarding its practice of “collaring” market orders by converting them to limit orders. Also, FINRA has ordered Robinhood Financial to pay $3.75 million in compensation to the trading platform’s customers.In 2024, The Toronto-Dominion Bank TD agreed to pay a $28 million penalties in response to the Consumer Financial Protection Bureau (“CFPB”) order concerning credit reporting issues. The bank has been accused of mishandling customers’ credit information and failing to make necessary amendments to its practices.The alleged violations against TD comprise the sharing of imprecise data regarding credit card delinquencies and the submission of bad information about certain accounts that the CFPB suspected to be fraudulent. The CFPB claims that certain accounts remained open despite the clients' voluntary closure of the accounts.UBS Zacks Rank and Price PerformanceOver the past three months, UBS Group shares have lost 7.2% against the industry’s 8.8% rise.Image Source: Zacks Investment ResearchUBS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UBS Group AG (UBS): Free Stock Analysis Report Toronto Dominion Bank (The) (TD): Free Stock Analysis Report Robinhood Markets, Inc. (HOOD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks