Swiss bank UBS has reiterated it will not take legal action against former management for losses that brought it to the verge of collapse during the financial crisis.
The move lessens the chance of any action being taken against former executives, because suits by individual shareholders would in many cases be prohibitively expensive and the Swiss government has said it could not provide the financial support for a class action.
"Experience has shown that such cases last many years, generate high costs, lead to negative international publicity and thus hamper UBS's efforts to restore its good name in the markets in which it operates," UBS said in a report today.
UBS prepared the transparency report - designed to review how the tens of billions of losses during the crisis and a damaging investigation by US tax authorities came about - at the recommendation of a Swiss parliamentary committee.
"A final, and particularly important, reason is that such proceedings would weaken UBS's legal position in pending cases, regardless of whether the former management is ever found to be liable," the bank also said of why it would not press its case.
In April, nearly 53 per cent of shareholders took the unprecedented step of voting against discharging former Chairman Marcel Ospel, ex-CEO Peter Wuffli and all those who were board members in 2007, from responsibility for their actions.
The government had to bail out UBS in 2008 after more than $50 billion of writedowns due to ill-fated investments led to a record annual loss.
The failure-to-discharge vote raised speculation UBS might bow to public pressure and seek compensation from the former executives.
However, shareholders did exonerate UBS's management for their actions in 2008 and 2009.
The case of UBS remains a hot-button issue. Members of a parliamentary committee that had recommended the government help pay for the class-action suit, have said they will continue to press for state legal assistance.
Zurich state prosecutors said late last year they would not open criminal proceedings against UBS employees as there was no evidence of a breach of Swiss law.
Reuters