UBS Tax Evaders Getting Rounded Up As Staff Flee For Better-Paid Jobs
The inexorable grip of the American tax man is starting to tighten around UBS and their tax-evading customers. Steven Rubenstein was the first to be arrested after UBS accidentally surrendered some of the names of tax evaders it was harbouring – he was released on $12m bail yesterday ahead of his hearing on April 22nd. Rubenstein has a $6m home plus two $1m apartments, a boat, and two Mercs. Sure you couldn’t have given one of those up in exchange for a contribution to society, hmm?
Now that the arrests are starting to be made, the Wall Street Journal looks at the scumbags who are debating whether to fess up and pay their back taxes, or hold out and hope their names aren’t on the list. “It’s better to come clean now instead of waiting and facing a heavier price later”, said IRS Commissioner Doug Shulman, possibly through a megaphone outside a Florida mansion. It’s thought that the sight of Rubenstein in cuffs will prompt lots of those trying to sneak out of their taxes to crap themselves and pay up. Some people aren’t even going to come forward, but instead quietly file amended tax returns and hope the IRS doesn’t want to hassle them for it. It’s all a wonderfully prosaic example of the brute fear instilled by prison prompts law-abiding.
Amid this dragging of UBS’s name through the mud, as well as the board shakeups and the horrendous financial year, some staff are getting the hell out of there. The Am Law Daily site has an interesting interview with a proudly, nakedly acquisitive former UBS investment banker called Lewis Steinberg. He says that he left his law firm four years ago because investment banking seemed like a gold-lined hoot, but he’s now returned to law as a partner in Linklaters, after the financial services industry turned for the worse. “I can actually give my clients better service [at a law firm]…I can be adequately compensated and perhaps better compensated”, he says.
He’s just one example of a growing trend. What with the attacks on bonuses, City salaries are having to increase to try and keep talent in place. The trouble is that there’s an assumption that workers in financial services will bow their heads and admit their greed – but the reality is there are a lot of Steinbergs out there who will quickly transfer to where the money is. London has recently lost, to New York, the top spot in highest earnings for financial services - if it carries on cutting compensation, we could easily start losing dynamic and driven staff. But obviously the compensation culture needs to change to ensure greater loyalty and prudence, while still encouraging competitiveness and originality – and that’s perhaps the greatest challenge facing the industry as it regroups.
Posted by Ben Beaumont-Thomas in Hot Money | April 9, 2009 12:21PM |