UBS defeats lawsuit over late Indonesian statesman's accounts

UBS AG (UBSN.S) has won dismissal of a lawsuit accusing it of seizing billions of dollars from inactive accounts over the past 30 years, including assets of the late Indonesian statesman and United Nations General Assembly President, Adam Malik.

Filed in September in a California federal court, the lawsuit said the bank "fast-tracked" the closure of inactive accounts to take assets for its own use and denied requests for an accounting of funds.

Karina Byrne, a spokeswoman for UBS, said the bank was pleased with the court's decision.

The lawsuit is one of numerous claims against Swiss banks involving secret accounts that have attracted the assets of the world's wealthy for decades. In 1998, UBS and Credit Suisse Group AG (CSGN.VX) agreed to pay $1.25 billion to settle claims over dormant wartime accounts of Holocaust victims.

Switzerland's largest bank, UBS has also been targeted by U.S. authorities in a long-running crackdown against tax evasion by wealthy Americans using secret Swiss accounts.

The bank's lawyers in November urged dismissal of the Malik lawsuit, challenging the court's authority to hear cases against companies headquartered outside the United States.

U.S. District Judge Phyllis Hamilton granted the motion at a hearing on Wednesday. A written opinion has not yet been entered in the case.

A lawyer for Malik's estate could not immediately be reached for comment.

Malik had about $5 million in currency and gold bullion at two UBS predecessor banks when he died in 1984, the lawsuit said. Malik's estate made numerous efforts to recover the funds over the years, but were told no records were available, the lawsuit said.

The predecessor banks, Swiss Bank Corp and Union Bank of Switzerland, combined in 1998 to form UBS.

The lawsuit was filed by AM Trust, which represents the Swiss bank claims of Malik's estate. A proposed class action, it also sought damages on behalf of UBS depositors worldwide, including about 1,000 U.S. citizens.

Thomas Easton, a lawyer for AM Trust, had argued that by operating branch banks in the United States, UBS had consented to the court's jurisdiction.

Lawyers for UBS disputed that argument. While subject to U.S. law, the bank's U.S. branches remain incorporated in Switzerland and subject to Swiss oversight, the lawyers said in a court filing last month.

The case is AM Trust v UBS AG, U.S. District Court, California Northern District, No. 14-4125.

Tags

UBS, Phyllis Hamilton, Swiss Bank Corp, Union Bank of Switzerland, United States

Copyright Thomson Reuters. All rights reserved.