UBS Lawsuits: Tax Evasion, LIBOR, and Credit Suisse Claims

UBS lawsuits span more than fifteen years and multiple continents, with the Swiss bank paying billions to resolve tax evasion prosecutions in the United States and France, a mortgage-backed securities fraud case, Puerto Rico bond fund claims, options strategy losses, and employee disputes — while still facing active litigation over its 2023 acquisition of Credit Suisse, a $400 million suit from exonerated LIBOR trader Tom Hayes, and a confirmed $92 million arbitration award tied to Tesla short-selling. Here is where the major cases stand.

Tax Evasion: The US and French Cases

UBS’s first major American legal reckoning came on February 18, 2009, when it entered a deferred prosecution agreement and paid $780 million in fines, penalties, interest, and restitution. The bank admitted conspiring to defraud the United States by impeding the IRS and turned over identities and account information for certain American clients with undeclared Swiss accounts. Court filings described Swiss bankers making roughly 3,800 trips to the United States in 2004 alone to market bank secrecy, sometimes using encrypted laptops and counter-surveillance techniques, and helping clients open accounts under nominee names or sham entities after UBS’s 2000 acquisition of Paine Webber obligated it to report US client income.¹

France ran a parallel prosecution covering cross-border activity between 2004 and 2012. A French court convicted UBS in 2019 of unlawful client solicitation and aggravated money laundering and ordered €4.5 billion in penalties, consisting of a €3.7 billion fine and €800 million in damages to the French state. An appeals court upheld the conviction in 2021 but cut the penalty to €1.8 billion. The French Supreme Court affirmed the conviction in 2023 and returned the penalty question to a lower court. The matter finally closed on September 23, 2025, when UBS agreed to pay €835 million — €730 million in fines and €105 million in civil damages.²³

Mortgage-Backed Securities Fraud: $1.435 Billion

In November 2018, the Department of Justice filed a civil complaint under the Financial Institutions Reform, Recovery, and Enforcement Act alleging UBS defrauded investors on 40 residential mortgage-backed securities issued in 2006 and 2007. The government said UBS knew that significant numbers of underlying loans failed underwriting guidelines, that property values were unsupported, and that many loans violated consumer protection laws. UBS agreed to pay $1.435 billion in civil penalties without admitting liability. The settlement was the final action by the DOJ’s RMBS Working Group, formed in 2012 to investigate conduct that contributed to the 2008 financial crisis.⁴

Puerto Rico Bond Fund Losses

UBS’s Puerto Rico subsidiary created 23 closed-end funds built primarily around Puerto Rico government-related debt and underwrote over $10 billion in bonds, earning more than $200 million in underwriting fees. When the island’s economy deteriorated, the funds’ value fell to roughly half their original value by March 2014, and investors accused UBS of misrepresenting the funds as safe while artificially supporting their prices.⁵

More than 2,000 arbitration cases followed. By October 2017, over $329 million in settlements and awards had been paid to clients, with UBS responsible for more than 90% of that total because the funds were proprietary. Regulatory settlements added more than $65 million: $26.6 million to the SEC in 2012, $5.2 million to Puerto Rico’s financial regulator in 2014, $15 million to the SEC in 2015, and $18.5 million to FINRA in 2015.⁶

Yield Enhancement Strategy

Between 2016 and 2017, UBS marketed a complex options program called the Yield Enhancement Strategy to roughly 600 investors; about 1,500 clients eventually invested approximately $6 billion. The strategy used an “iron condor” options spread on the S&P 500 Index and was pitched as a market-neutral way to generate income with limited downside risk.⁷

Losses were significant, and the SEC found that UBS had internally documented the “possibility of significant risk” but failed to share that data with financial advisors or clients. In June 2022, UBS settled with the SEC for approximately $25 million, including $17.4 million in civil penalties and $5.8 million in disgorgement, without admitting or denying the findings.⁸ Individual FINRA arbitration claims piled up alongside the SEC action, with estimated total losses exceeding $1 billion. Notable awards include $5.2 million in 2022 and $3.2 million in 2023.⁷

Murray v. UBS: The Supreme Court Whistleblower Ruling

Trevor Murray, a former UBS research strategist, alleged the bank fired him in February 2012 after he told his supervisor that trading desk leaders were pressuring him to skew his independent research. He filed a whistleblower retaliation complaint under the Sarbanes-Oxley Act. A jury found for Murray, and the district court awarded nearly $1 million in damages plus $1.769 million in attorney’s fees. The Second Circuit vacated the verdict, holding Murray needed to prove UBS acted with “retaliatory intent” — a reading that conflicted with other federal circuits.⁹

On February 8, 2024, the Supreme Court unanimously reversed in an opinion by Justice Sotomayor. A Sarbanes-Oxley whistleblower does not have to prove retaliatory intent, the Court held; the plaintiff must show protected activity was a “contributing factor” in the adverse action, and the employer must then show by clear and convincing evidence it would have acted the same way regardless.¹⁰ A federal judge ordered a retrial in February 2026. The parties settled the following month, and the case was dismissed on March 12, 2026, with the settlement amount undisclosed.¹¹

Tom Hayes’s $400 Million LIBOR Lawsuit

Tom Hayes, the former UBS and Citigroup trader convicted in 2015 of conspiring to manipulate the LIBOR benchmark, served roughly five years of an eleven-year prison sentence before his release in 2021. The UK Supreme Court overturned his conviction in July 2025, finding that the trial judge had erred in instructing the jury on how commercial interests factored into LIBOR submissions. A separate US case against Hayes had been dismissed by a judge in October 2022.¹²

With his record cleared, Hayes sued UBS in Connecticut state court for more than $400 million in compensatory and punitive damages. His complaint, made public in October 2025, accuses UBS of malicious prosecution, alleging the bank cast him as the “evil mastermind” and “perfect fall guy” to shield senior management, and that the trading activity at issue was common practice known to senior executives.¹³ In April 2026, a Connecticut judge ordered UBS to turn over certain communications the bank had with its lawyers and prosecutors regarding the underlying criminal cases.¹⁴ UBS has declined to comment, and the case remains pending.

$92 Million Tesla Short-Selling Arbitration

Nine investors from the Hansen, Nelson, Valentini, and Kramer families filed claims in 2021 alleging that UBS financial advisor Andrew D. Burish recommended an unsuitable and risky strategy of shorting Tesla stock between September 2019 and July 2020, then advised them to hold as losses mounted. In February 2025, a FINRA arbitration panel awarded $92.2 million, including $69.1 million in punitive damages against UBS Financial Services and $3 million against Burish personally.¹⁵

UBS moved to vacate, arguing the panel exceeded its authority and the punitive damages were grossly excessive. In May 2026, US Chief District Judge Stephanie M. Rose denied the motion and confirmed the award, writing that accepting UBS’s argument “would open the courthouse doors to every losing party following an arbitration award of punitive damages.”¹⁵

Credit Suisse Acquisition Litigation

UBS’s emergency acquisition of Credit Suisse in March 2023 produced its own wave of cases. The largest disputes concern $17 billion in Credit Suisse Additional Tier 1 bonds that were wiped out during the merger after Switzerland’s financial regulator, FINMA, ordered the writedown.

AT1 Bondholder Claims

More than 100 plaintiffs — institutional investors, hedge funds, and individuals from Europe, Asia, and North America — have sued in multiple jurisdictions, alleging the writedown was carried out improperly and without adequate warning while equity holders received some compensation. A group holding over $82 million in AT1 debt sued the Swiss government in the US District Court for the Southern District of New York (Case No. 1:2024cv04316). In September 2025, the court dismissed the case for lack of subject-matter jurisdiction under the Foreign Sovereign Immunities Act, accepting Switzerland’s argument that its actions were governmental rather than commercial. The plaintiffs have appealed to the Second Circuit.¹⁶

Bondholders have also initiated investor-state arbitration against Switzerland under bilateral investment treaties. As of early 2026, two formal arbitration claims had been filed and the Swiss government had received at least nine notices of dispute. In a related Swiss proceeding, the Federal Administrative Tribunal annulled the FINMA write-off decree in October 2025, finding the legal trigger event had not actually occurred. That ruling is on appeal at Switzerland’s Federal Tribunal, which has provisionally suspended the annulment, so the writedown remains in effect for now.¹⁷

Shareholder Class Action

Shareholders Gregory Stevenson and Nicole Lawtone-Bowles filed a consolidated proposed class action against Credit Suisse subsidiaries, former executives, and auditor KPMG in the Southern District of New York, seeking up to $120 billion in damages for alleged mismanagement and violations of the Racketeer Influenced and Corrupt Organizations Act. Judge Colleen McMahon dismissed the RICO claims with finality in February 2024 and dismissed remaining Swiss-law claims on forum non conveniens grounds, finding the dispute “overwhelmingly Swiss.” The Second Circuit affirmed on February 3, 2026.¹⁸

UBS has acknowledged in regulatory filings that disputes inherited through the Credit Suisse acquisition may carry greater liabilities than initially expected.¹⁹

Recent Regulatory Penalties

Beyond the headline cases, UBS has absorbed a series of US regulatory fines:

Off-channel communications ($200 million combined, September 2022): the SEC fined UBS $125 million and the CFTC fined it $75 million as part of an industry-wide crackdown on employees using personal messaging apps for business without preserving the communications. UBS admitted the violations, which ran from January 2018 through September 2021 and involved personnel at all seniority levels.²⁰
Volatility-linked ETPs ($8 million, 2021): the SEC censured UBS for failing to maintain policies to prevent unsuitable investments in volatility-linked exchange-traded products.²¹
529 plan share-class failures ($4.06 million restitution, 2021): FINRA ordered UBS to pay restitution for failing to supervise 529 college savings plan share-class recommendations.²¹
Blue sheets reporting ($1.1 million, January 2025): FINRA fined UBS for inaccurate and incomplete trading data submitted due to coding errors during a system migration. UBS self-reported and resubmitted corrected data.²²

California Advisor Class Action

A class action titled Hutcheson et al. v. UBS Financial Services, Inc. (Case No. CV0005398) was filed in Marin County Superior Court on behalf of UBS financial advisors in California, alleging violations of state law on reimbursement of business expenses, improper wage deductions, and untimely payment of wages. The class covers advisors employed between July 2020 and March 2025, with a broader group dating to December 2016 covered under California’s Private Attorneys General Act. A final approval hearing was scheduled for August 1, 2025. The settlement amount has not been publicly disclosed.²³

1
U.S. Department of Justice. UBS Enters Into Deferred Prosecution Agreement
2
Le Monde. UBS to Pay 835 Million to Settle French Tax Evasion Case
3
UBS. French Tax Matter
4
U.S. Department of Justice. UBS Agrees to Pay $1.435 Billion for Fraud in Sale of Residential Mortgage-Backed Securities
5
Forbes. Puerto Rico Debt Crisis Lawsuit Claims UBS Scammed Island Residents
6
CNBC. Broken Bonds: Wall Street’s Role in Wiping Out Puerto Ricans’ Savings
7
AdvisorHub. Claims Over UBS Options Strategy Soar to Over $1 Billion
8
U.S. Securities and Exchange Commission. SEC Charges UBS for Failures Relating to a Complex Investment Strategy
9
Supreme Court of the United States. Murray v. UBS Securities, LLC, No. 22-660
10
SCOTUSblog. Murray v. UBS Securities, LLC
11
Law360. UBS Whistleblower Suit Ends in Settlement After Retrial Order
12
Reuters. Exonerated Trader Tom Hayes Sues UBS for $400 Million Over LIBOR Accusations
13
The Wall Street Journal. Tom Hayes, Face of LIBOR Scandal, Sues UBS for $400 Million
14
Law360. UBS Must Reveal Atty Comms in Ex-Trader’s $400M LIBOR Suit
15
InvestmentNews. UBS Loses Appeal to Strike $92.2 Million Arbitration Payment to Clients
16
Finews. AT1 Bondholders Appeal Dismissal of US Lawsuit Against Switzerland
17
IISD. Switzerland Faces ISDS Claims Over Credit Suisse AT1 Bond Write-Off
18
Bloomberg Law. Credit Suisse Investors Lose Bid to Litigate Claims in US Court
19
UBS. UBS First Quarter 2026 Results
20
U.S. Securities and Exchange Commission. SEC Charges 16 Wall Street Firms With Widespread Recordkeeping Failures
21
FINRA. UBS Financial Services Inc. BrokerCheck Report
22
FINRA. FINRA Disciplinary Actions – March 2025
23
UBS CAFA Settlement. Andrew Hutcheson, Et Al. v. UBS Financial Services, Inc. Settlement