UBS Faces New Pressure in New York Court Over Past Nazi Accounts

(Bloomberg) — Tucked under the arcade at 49 Marktgasse in Bern’s historic city center is an opaque glass entranceway with a small sign identifying it as a branch of UBS Group AG, one of hundreds across Switzerland.

But the late-Baroque facade of the building conceals a special, darker history, one that reflects persistent political and legal problems for the bank thousands of miles away, in the US.

For at least two years in the late 1940s, the building, then owned by a predecessor bank of Credit Suisse, housed a key stop on the secret routes that allowed Nazi officials to escape justice and flee to South America, known as rat lines.

That the Swiss bank was landlord to the Argentine Immigration Office is just one of the revelations that has emerged in a multi-year investigation into its servicing of Nazi-linked accounts before, during and after World War II. Credit Suisse at one point had sought to close down the probe as it revealed the depths of those ties. But the inquiry has continued under pressure from Jewish groups and the US Senate. UBS took over Credit Suisse, along with its legal liabilities, in 2023.

Now, as the investigation nears its conclusion, UBS is locked in a dispute in a New York court with the Simon Wiesenthal Center, a US-based group known for its pursuit of Nazis, over whether it could face billions of dollars in new financial claims for its wartime business with the Third Reich.

UBS argues that it’s willing to continue the probe — which has cost the bank hundreds of millions of dollars in legal and other experts’ fees — but it wants a court to provide assurances that it won’t face fresh claims for financial restitution based on new revelations.

It argues that a landmark 1990s settlement in which UBS and other Swiss banks paid $1.25 billion to settle the claims of Nazi victims covered any potential further liability — known or unknown at the time.

US District Judge Edward Korman, who presided over that settlement more than a quarter century ago, held a hearing Tuesday in Brooklyn federal court in which lawyers for UBS and SWC offered starkly different interpretations of that accord.

UBS attorney David Burns said the bank wants a clarification from Korman about the accord to block SWC from suing for more money and to bar the organization from publicly discussing any findings about Nazi assets.

“There is no question that they have threatened litigation,” Burns said. “We believe that is something they should not be doing.”

He said UBS is trying to conduct an investigation of bank records with the “overhang” of potential litigation that demands further payouts.

In response, SWC attorney Faith Gay said the organization has not threatened to sue UBS but argued that Korman could not amend his settlement agreement. She refused to give the bank an assurance that SWC won’t sue in the future if new evidence is uncovered.

“This is an end run around the settlement you guys worked so hard to do 25 years ago,” Gay said. “You want to expand beyond that, and it’s wrong.”

Korman asked whether SWC would be satisfied if the bank handed over all the documents it sought in exchange for a promise not to sue. Another lawyer for SWC, Robert Gilmore, said: “I can’t say never and forever.”

The judge made no ruling on the bank’s request to clarify the settlement agreement.

UBS said it “welcomes any new findings of Nazi accounts and improper activity” and expects completion of the investigation to cost another $100 million, according to a Feb. 27 filing in the case.

The conflict erupted publicly at a US Senate hearing on Feb. 3, where legislators from both parties accused the bank of stonewalling on its obligations to Nazi victims.

“UBS’s conduct is absurd and a historic shame that’ll outlive today’s hearing,” Senate Judiciary Committee Chairman Chuck Grassley said at the session.

UBS executives reject that. Last week, they published an open Q&A on their website, reiterating their willingness to share the remaining records with the independent ombudsman overseeing the probe, Neil Barofsky, but only if specific safeguards are in place to protect attorney-client privilege.

UBS declined to comment for this article and referred back to the Q&A published last week.

Barofsky said he needs unrestricted access to the documents to complete his probe, telling the Senate hearing that they go to “the heart of our investigation.” UBS says the remaining documents are some 150 files, a fraction of the 16.5 million documents it’s shared with Barofsky to date.

At the Senate hearing, Barofsky provided a 73-page update on the investigation, showing that it had revealed hundreds more possible leads on Nazi-linked accounts, including those of senior officials and entities.

The Argentine Immigration Office “would become a nerve center for one of history’s most notorious war criminal escape networks,” Barofsky wrote.

The predecessor bank of Credit Suisse “opened and maintained accounts for nearly all of the key” AIO employees and several of its leaders, accounts that “were almost certainly used to fund illegal smuggling activities such as bribing officials and procuring fraudulent documents,” Barofsky wrote.

The probe also confirmed that the bank held an account for the economic arm of the Nazi SS, one whose existence the bank had denied in the 1990s, according to Barofsky. He expressed concern at the Judiciary Committee hearing that granting the bank’s request could hinder the investigation.

UBS officials testified that the bank needs reassurance that it won’t face new claims for restitution.

The case is Jacob Friedman v. Union Bank of Switzerland, 96-cv-4849, US District Court, Eastern District of New York (Brooklyn).

(Updates with details from hearing in Brooklyn federal court.)

©2026 Bloomberg L.P.