| Appeal of UBS Holding Co
Approval by Federal Reserve Bank Is Shown to
Governors None Act
by
Matthew Russell Lee, Patreon Book
Substack
SOUTH
BRONX/SDNY, Feb 5 –
Amid the FDIC's bid to
eliminate public notice of and
public comment on branch
applications, UBS -- Union
Bank of Switzerland -- is
moving to convert to a
national bank in the US and
become a bank holding company.
Despite a
November 11, 2025 formal
challenge by Fair Finance
Watch, Fed approval was doled
out on January 26, 2026 - by
the Federal Reserve Bank of
New York. On February 5 FFW
was told its appeal was shown
to the Governors, none of whom
did anything, see below.
This while the
Fed has yet to provide
documents on Inner City Press'
FOIA request for any
safeguards the Fed has given
that it allows - puts - banks
on the boards of directors of
its Reserve Bank, which now
dole out approvals to banks.
The blatant and
costly conflict of interest on
Silicon Valley Bank, on the
FRBSF's board, was one thing -
still not addressed. Now the
massive UBS. FFW immediate
submitted, to the Board and
the FRBNY's Keith Goodwin, a
request for Board review
citing UBS impending
appearance on Capitol
Hill.
FFW filed for
Board review, and on January
28 the FRBNY wrote to UBS, "On
January 26, 2026, the
commenter filed a petition for
review with the Secretary of
the Board. Acting under
delegated authority, this
letter is to advise that
Applicants should not
consummate the proposal until
specifically authorized by the
Reserve Bank or by the Board.
The Board expects to decide
whether to review the Reserve
Bank’s delegated action within
10 calendar days of the date
of the delegated action, i.e.,
on or before February 5, 2026,
and will notify you of that
action."
On
November 11 Fair Finance Watch
filed opposition to the
Federal Reserve Board and to
the Office of the Comptroller
of the Currency:
Dear Chair Powell, Comproller Gould,
others
This is a
timely first comment on the applications by
UBS Group AG and UBS AG, both of Zurich,
Switzerland, and UBS Americas Holding LLC and
UBS Americas Inc to become bank holding
companies by acquiring UBS Bank USA, Salt Lake
City, Utah, upon the conversion of UBS Bank
USA from a state-chartered industrial bank to
a national bank.
UBS, beyond its involvement in predatory
subprime lending - see, e.g., "UBS to pay $300
million to resolve US mortgage securities
cases," August 4, 2025 - has numerous other
compliance scandal on which public hearings
should be held, on this application and
possible plan to relocate to the
US.
There is tax evasion and retaliation against
whisteblowers: “France: UBS fined in France
for harassing whistleblowers”, 10 March 2025
The Swiss bank UBS was fined €75,000
(CHF71,410), the maximum penalty, in Paris on
Monday for moral harassment by its French
subsidiary of two whistleblowers, who had
denounced the tax evasion system organised by
the bank. UBS Europe, which absorbed the
French branch, was also ordered to pay €50,000
in damages to Nicolas Forissier, the former
head of internal auditing. However, the bank
was acquitted of witness tampering and
obstructing the health, safety and working
conditions committee. According to Forissier’s
lawyer, William Bourdon, this is the first
time in France that a whistleblower has
obtained a conviction against his former
employer. … At the hearing, the public
prosecutor had requested a maximum fine of
€225,000 for the three offences.
There are human rights - and managerial -
issues: the Society for Threatened Peoples
Switzerland (STP) filed a specific instance
against UBS Group AG (UBS) at the Swiss NCP.
The complaint concerns the bank’s financial
ties with Hangzhou Hikvision Digital
Technology Co. Ltd. (Hikvision), a provider of
modern surveillance technology that has played
a key role in the mass surveillance of the
Uyghurs and other Turkic minorities in
Xinjiang, China. Also involving
private prisons in the US.
(On
November 25 UBS through Sullivan &
Cromwell submitted a dismissive response,
stating
that " FFW criticizes UBS for
business relationships with
certain clients (e.g., private
prisons).
There
are managerial factor issues, particularly on
an initial application to become a US
bank holding company. Fair Finance Watch
hereby timely requests hearings, and the
denial of these UBS applications.
The denial was by a
conflicted Reserve Bank.
On February 5 the
Fed wrote: "You previously
submitted a comment on the
Application, expressing
concerns about UBS’s
managerial resources and
corporate governance.
Specifically, the comment
expressed
concerns regarding (1) an
agreement UBS entered into in
2025 with the U.S. Department
of
Justice (“DOJ”) after
acquiring the U.S.
subsidiaries of Credit Suisse
Group AG (“Credit
Suisse”), wherein UBS agreed
to pay Credit Suisse’s
remaining obligations in
connection with a settlement
agreement that Credit Suisse
had previously entered into
with the DOJ in 2017; (2) two
prior lawsuits in France,
wherein UBS was sued by the
French government for
allegedly assisting
French clients in evading
taxes between 2004 and 2012,
and for allegedly harassing
two whistleblowers
who reported this conduct;5
(3) a settlement agreement
entered into in 2015 between a
broker–dealer subsidiary of
UBS, UBS Securities LLC, and
the U.S. Securities and Exchange
Commission (“SEC”), related to
allegations UBS Securities
LLC’s alternative trading
system violated SEC rules
regarding minimum pricing
increments;6 and (4) alleged
investments
by UBS in (i) a company that
provides surveillance
technology that is allegedly
used in China
and (ii) private prisons in
the United States. In acting
on the Application, the
Reserve Bank
found that concern number (1)
was not relevant for purposes
of assessing the managerial
factor
for UBS because it did not
involve conduct by UBS,
concerns number (2) and number
(3) did not
preclude approval for the
reasons explained in the
letter addressed to you on
January 26, 2026
(the “Reserve Bank’s letter”),
and concern number (4)
involved matters that are
outside the scope
of the limited statutory
factors that the Federal
Reserve is authorized to
consider when reviewing
an application under section 3
of the BHC Act.7 In addition,
the Reserve Bank’s letter
advised
that the Reserve Bank also
considered concerns number (1)
through (3) with respect to
the
financial resources of UBS.
In the petition for review,
you assert that the Board
should not have permitted the
Reserve
Bank to act on an application
involving a comment that
raises substantive issues
because
(1) Reserve Banks do not have
delegated authority to deny
applications and (2) Reserve
Banks [See Lee
v. Bd. of
Governors of
the Fed. Rsrv.
Sys., 118 F.3d
905, 911 (2d
Cir. 1997).
Nevertheless,
in its
discretion,
the Board has
reviewed your
petition.]
are quasi-governmental
entities with directors who
are the heads of banks and
bank holding companies.
As cited in the Reserve Bank’s
letter, the Board’s “Guidance
on Protested Proposals”
SR Letter No. 97-10, part
II.A.5 (April 24, 1997),
provides that, in certain
instances, a Reserve
Bank may act on an application
that received a substantive
adverse comment. Additionally,
no
directors or officers of
Applicants serve on the board
of the Reserve Bank.
See, e.g., Sept
10, 2025: https://www.americanbanker.com/opinion/the-fdic-is-undercutting-a-key-element-of-the-cra
But now the
Federal regulator(s) blithely
propose(s) to eliminate public
notice and public comment on
banks' proposals to expand -
and the Fed doles out
approvals through conflicted
Reserve Banks. The
above-quoted reasoning is that
few comments are filed. So,
that is now changing.
***
Your
support means a lot. As little as $5 a month
helps keep us going and grants you access to
exclusive bonus material on our Patreon
page. Click
here to become a patron.
Feedback:
Editorial [at] innercitypress.com
SDNY Press Room
500 Pearl Street, NY NY 10007 USA
Mail: Box 130222, Chinatown Station,
NY NY 10013
Reporter's mobile (and weekends):
718-716-3540
Other, earlier Inner City Press are
listed here,
and some are available in the ProQuest
service, and now on Lexis-Nexis.
Copyright 2006-2026 Inner City
Press, Inc. To request reprint or other
permission, e-contact Editorial [at]
innercitypress.com
|
,
