US tax scandal brings down Wegelin
Switzerland's oldest private bank, Wegelin & Co, will sell most of its business to the Raiffeisen Group amid a dispute with United States tax authorities.
Wegelin, which was founded in 1741, said on Friday most of its clients and staff would be transferred to a company called Notenstein Private Bank which will in turn become a 100 per cent subsidiary of the Raiffeisen banking group. The sale price has not been made public.
US authorities charged three Wegelin staff on January 3 with conspiring to hide more than $1.2 billion (SFr1.1 billion) in client assets from tax officials. Wegelin said at the time that it was prepared for the “expected quarrel” and the bank had not broken any Swiss laws.
Wegelin senior managing partner Konrad Hummer said on Friday the sale had been brought about because of “the extraordinarily difficult situation and threat to the bank brought about by the legal dispute with the US”.
“I never could have imagined that we, as owners of Switzerland’s oldest bank, would have ever considered selling,” Hummer said.
Wegelin said the company will remain in existence to finalise the closure of all remaining US client relationships and to continue the negotiations with the American justice authorities.
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