Legal News

The Evening Report: UBS Settles with Feds; A Big Tobacco Verdict

By Ashby Jones

Just a couple of late-breaking legal news stories to get you up to speed on before we turn off the lights.

UBS AG, Switzerland’s largest bank, has admitted to helping U.S. taxpayers hide bank accounts from the IRS and has entered into a deferred-prosecution agreement, the U.S. Justice Department announced Wednesday.

As part of that agreement, UBS has agreed to immediately provide the U.S. government with the identities and account information of some U.S. customers. The bank will pay $780 million. Click here for the WSJ story; click here for the NYT article. Click here here, here, and here for earlier LB posts on the UBS situation.

According to the Times article, the move by UBS to settle the case, in advance of a Senate subcommittee hearing next Tuesday, shows that the bank was close to being indicted for not cooperating with prosecutors.

Last month, prosecutors gave UBS “several weeks” to hand over to the United States client names or face possible indictment. Prosecutors suspect that UBS helped these clients hide $20 billion in violation of United States tax laws, thereby evading $300 million a year in taxes.

Click here for a copy of the deferred-prosecution agreement.

A jury Wednesday ordered Philip Morris, a unit of Altria Group Inc., to pay the widow of a longtime smoker who died of lung cancer $8 million in damages in a case that could blaze a legal trail for about 8,000 similar Florida lawsuits. Click here for the AP story.

The Hess case was the first to go to trial since the Florida Supreme Court in 2006 voided a $145 billion class-action jury award, which was by far the highest punitive damage award in U.S. history.

The court said each smoker’s case had to be decided individually, but let stand that jury’s findings that tobacco companies knowingly sold dangerous products and hid risks from the public.

Full post as published by Law Blog - WSJ.com on February 18, 2009 (boomark / email).