UBS urges US judge to curb liability for nazi-linked crimes

UBS Asks US Court to Bar New Holocaust Lawsuits Over Nazi-Era Claims

UBS Seeks Legal Protection Against Renewed Claims

By Jonathan Stempel

NEW YORK, March 10 (Reuters) - UBS urged a U.S. judge on Tuesday to shield it from new Holocaust-related litigation arising from an investigation of the former Credit Suisse's activities during World War Two.

UBS Requests Clarification on 1999 Settlement

A  lawyer for UBS asked U.S. District Judge Edward Korman in Brooklyn to issue a "clarifying order" that the $1.25 billion settlement reached in 1999 covered "all claims, past, present and future" related to the Holocaust, World War Two, and their prelude and aftermath.

Credit Suisse, which UBS bought in a Swiss government-arranged rescue in 2023, distributed the $1.25 billion to more than 458,000 Nazi victims and their families, according to court papers.

UBS requested Korman's intervention after an investigation commissioned in 2020 by Credit Suisse uncovered additional ties between that bank, its predecessors and Nazis, including 890 accounts with potential Nazi links.  The judge did not indicate when he would rule.

UBS WANTS 'COMPLETE CLOSURE'

During a 2-1/4-hour court hearing, UBS' lawyer David Burns said the Simon Wiesenthal Center, a Jewish human rights group, should not be permitted to reopen the settlement, "promote public controversy" about it, or file new claims as additional information surfaces about Credit Suisse's relationship with Nazis.

"The Wiesenthal Center has from the outset made the very public and private claim that Nazi assets are not part of the settlement, and has threatened litigation," Burns said. UBS, he said, wanted "complete closure."

Wiesenthal Center's Response

Faith Gay, a lawyer for the Wiesenthal Center, which endorsed the 1999 settlement, criticized UBS for seeking an advisory opinion that "expands and reinterprets" the settlement by releasing a range of claims "as broad as the Grand Canyon." She also said there is no threat to sue.

"There’s nothing for you to decide," Gay told the judge, who oversaw the settlement. "And yet they've given us this proposed order that binds all parties."

Gay also accused UBS of violating her client's free speech rights by trying to silence challenges to the settlement's legitimacy, likening it to "putting a sock in Simon Wiesenthal’s mouth.”

Investigation Into Nazi-Linked Accounts

Investigator Found Accounts With Potential Nazi Links

The dispute focuses in part on UBS' resistance to turning over about 150 documents sought by Neil Barofsky, a lawyer conducting the investigation, and which the bank believes are protected by attorney-client privilege.

UBS said it has turned over 16.5 million documents to Barofsky, and would give him the disputed documents if Korman issued an appropriate clarifying order.

Barofsky is expected to finish his investigation this year.

Judge and Senate Judiciary Committee Involvement

Korman said it was his recollection that Nazi assets never came up during settlement negotiations in 1999. He encouraged both sides to negotiate which documents could be turned over.

The U.S. Senate Judiciary Committee heard details about Barofsky's investigation at a hearing last month.

Its chairman, Republican Senator Charles Grassley, told reporters that holders of the 890 accounts included the German Foreign Office, which arranged the deportation of Jews to concentration camps, as well as the SS paramilitary organization and a German arms manufacturer. 

Apologies from UBS and Credit Suisse

UBS and Credit Suisse have apologized for their roles in the Holocaust.

(Reporting by Jonathan Stempel in New York; Editing by Stephen Coates)