U.S. Court Clears Swiss Bank UBS in Whistleblower’s $20 Million Libel Suit

A New York appeals court has dismissed a U.S. whistleblower’s $20 million libel suit against Swiss bank UBS, his former employer, concluding that statements the Zurich-based bank made about him were at least “substantially true.”

Court documents dated May 21 showed that the appeals court upheld an earlier ruling dismissing claims that Bradley Birkenfeld brought against the bank in 2017, in which he accused UBS of acting with malice in making statements about him to the media.

Birkenfeld spent 2-1/2 years in prison for helping a billionaire client evade taxes, but got a $104 million award from U.S. tax authorities for his role as a whistleblower. He had provided tips that led to UBS being fined $780 million in 2010 by U.S. authorities for helping wealthy Americans hide up to $20 billion.

In his libel lawsuit in the New York state court in Manhattan, Birkenfeld contended that UBS sought to block his efforts to expose the bank’s “decades-long wrongdoing” and to undercut credibility and sales of a book he had written.

In statements to U.S. media, UBS had called Birkenfeld’s book an “often unsubstantiated recollection” and said he had been convicted of “having lied to U.S. authorities.”

The appeals panel, in its decision this week, concluded that UBS’s statements were not inaccurate.

Birkenfeld “admitted to illegal conduct, including, inter alia, that he ‘prepared false and misleading IRS Forms’ and assisted ‘wealthy U.S. clients in concealing their ownership of the assets held offshore,’” the judges wrote.

“These admitted facts support the conclusion that (UBS’s) quoted statements… were, at a minimum, substantially true, if not absolutely true.”

A spokeswoman for UBS declined to comment.

Reuters | May 28, 2019