Spain’s Tax Breaks, TD Bank, Ex-UBS Banker Trial: Compliance
Oct. 16 (Bloomberg) — The European Union expanded its crackdown on illegal tax breaks, ordering Spain to recover money from companies that benefited from rules encouraging merger activity outside of the country.
The European Commission said the Spanish measures unfairly rewarded companies for buying stakes in foreign competitors. Telefonica SA last year lost a court bid to challenge a related EU probe into Spanish tax breaks.
The EU is targeting tax deals throughout the 28-nation bloc that may have given domestic and overseas companies unfair advantages. The EU is reviewing agreements between Ireland and Apple Inc., Luxembourg and Amazon.com Inc. and Starbucks Corp. in the Netherlands.
The Brussels-based commission first began its probe into Spain in 2007 after complaints.
Compliance Action
TD Bank Settles With States Over Data Breach, New York Says
TD Bank NA, which lost electronic files containing information for as many as 260,000 customers in 2012, agreed to pay $850,000 to settle a multistate probe into the security breach, New York’s attorney general said.
The unit of Canada’s Toronto-Dominion Bank lost unencrypted backup tapes containing 1.4 million customer files with information accumulated over at least eight years, Attorney General Eric Schneiderman said. The accord also requires the bank to improve its data-security practices.
The number of cybersecurity incidents globally has soared 48 percent to 42.8 million this year, according to a PricewaterhouseCoopers LLP survey. Data breaches in New York more than tripled from 2006 to 2013 and cost businesses in the state at least $1.37 billion
Courts
Ex-UBS Banker Weil Knew Nothing of Tax Scheme, U.S. Jurors Told
Raoul Weil, once the head of UBS AG’s global wealth- management business, didn’t know that “rogue” underlings were helping Americans evade taxes, his lawyer told jurors at the start of a trial in Florida.
Weil, 54, was indicted in 2008 and accused of conspiring to help as many as 17,000 U.S. taxpayers hide $20 billion in accounts from the Internal Revenue Service. He was arrested last year in Bologna, Italy, and waived extradition to face trial in Fort Lauderdale, where jurors got an overview of the case Oct. 14.
Defense lawyer Aaron Marcu said the U.S. case hinges on “rogue” bankers from UBS, the largest Swiss bank, and clients who will implicate Weil to save their own skins. Weil is the highest-ranking official among three dozen foreign bankers, lawyers and advisers charged in a seven-year U.S. crackdown on offshore tax evasion.
Justice Department attorney Mark Daly told jurors Weil directed a complex scheme to avoid investigation using specially configured laptops.
One witness against Weil will be Martin Leichti, another former head of cross-border banking at UBS, Daly said. Leichti signed an agreement in 2008 in which the Justice Department agreed not to prosecute him for tax crimes.
The case is U.S. v. Weil, 08-cr-60322, U.S. District Court, Southern District of Florida (Fort Lauderdale).
Interviews/Commentary
EU’s Barnier Slams Bonus Rule Evasion by Banks as ‘Bad Signal’
The use by banks of allowances to evade bonus rules sends a “bad signal,” Michel Barnier, the European Union’s financial- services chief, said in an e-mailed statement.
The allowances have been characterized in the press as a means of circumventing the Capital Requirements Directive on the maximum ratio between fixed and variable remuneration, Barnier said in the statement.
Use of the allowances signals to society that “the banks have not learned the lessons of the financial crisis” and have failed to adapt their cultures to the current regulatory environment, he said.
The commission and the European Banking Authority will review the situation, Barnier said.
–With assistance from Christie Smythe in Brooklyn, Jim Brunsden and Gaspard Sebag in Brussels, David Voreacos in Newark and Susannah Nesmith in Fort Lauderdale, Florida.
To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net, To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net. Andrew Dunn, Charles Carter
