Swiss private bank Julius Baer has been ordered to pay CHF 150 million ($161.5 million) for “unauthorized withdrawals” that occurred following the fall of the Berlin Wall, the bank said Friday, though it intends to try to recoup the money from rival Swiss lender UBS.
Between 1990 and 1992, approximately CHF 97 million ($64.6 million at the time) was transferred out of East Germany through an account held at former Swiss bank Cantrade, which has since been acquired by Julius Baer. The transfer was related to a financial network operated by Rudolfine Steindling, an East German agent known as “the Chanel communist” because of her lavish lifestyle, according to the Financial Times.
Steindling died in Tel Aviv in 2012, the FT said, at which point prosecutors switched their focus from her personal assets to the banks that helped facilitate her finances.
In 2014, the Bundesanstalt für vereinigungsbedingte Sonderaufgaben, a task force set up to facilitate reunification of Germany, initiated legal proceedings against Julius Baer for the recovery of the funds plus accrued interest.
After a six-year legal battle, the Swiss Federal Supreme Court issued a ruling that Julius Baer must pay CHF 150 million, representing the CHF 97 million plus interest accrued since 2009, to the task force. Julius Baer said the payment is fully covered by a provision booked in December.
Julius Baer says, though, that when it acquired Cantrade through the purchase of Bank Ehinger & Armand von Ernst from UBS in 2005, UBS “was notified of the claims by the BvS,” and, therefore, Julius Baer “will pursue such notification further.”
UBS spokesperson Samuel Brandner told Fastinform, “We take note of the decision and Julius Baer’s intention.” Brandner did not immediately respond to further questions about any action UBS might take or whether Julius Baer has contacted UBS about the decision.
Unnamed executives at Julius Baer told the Financial Times that they are prepared to take formal legal action against UBS if no settlement can be reached.