In 2009, after the UBS case, Julius Baer board members decided to tackle the US business and the issues it might create. Based on the advice of a US law firm, the board decided to inform the US Department of Justice (DoJ) that it, too, had been dealing with US taxpayers that could be seen as problematic. Julius Baer decision was taken against the advice of the Swiss financial authorities (FINMA) who still believed in a global settlement at the time.
According the Wall Street Journal ‘Julius Baer’s decision may be included in a statement of facts to be published alongside the bank’s settlement’. The newspaper adds that the fine is the main interrogation of the settlement, ‘the question of the size of Julius Baer’s US penalty has become so pervasive that the bank now enlists a research firm to gather estimates, and distributes them in a report to analysts. The most recent report, which was issued this February but not made public, included analyst estimates ranging from 300 million francs to 850 million francs’.
In 2011, the Justice Department ratcheted up the pressure on Julius Baer with an indictment of two of its employees for allegedly helping U.S. clients hide at least $600 million in assets. The employees haven’t responded to the charges.
As a reminder Julius Baer is a part of a group referred to as a Category 1 bank. Category 1 banks are the institutions that were already under investigation by the DoJ at the time of the publication of the US Program on August 29, 2013. They are excluded from the Program. Fines are defined on an individual basis and they generally enter into a Deferred Prosecution Agreement (DPA).