Top UBS banker detained in US

9.15am BST

* David Gow
* guardian.co.uk,
* Wednesday May 7 2008
* Article history

This article was first published on guardian.co.uk on Wednesday May 07 2008. It was last updated at 10:33 on May 07 2008.

A top banker at UBS has been "briefly detained" by the US authorities investigating whether the Swiss bank helped its American customers evade tax.

The bank confirmed last night that the US department of justice (DOJ) is carrying out the investigation.

It refused to name the banker but the Financial Times identified him as Martin Liechti, head of UBS's wealth management operations in North and South America. Wealth management is the core of UBS's private banking operations and Liechti is believed to have been held during a visit to Miami last month.

The Financial Times said that he had been held as a "material witness" and is to stay in the US while talks with the DOJ continue. It was unclear why he was in the US last week, the paper added.

The DOJ is investigating investment advice UBS gave its US private banking clients between 2000 and 2007 while the main financial regulator, the SEC, is also investigating whether employees of the Swiss bank failed to register with it as required. German prosecutors clamping down on thousands of rich Germans using trusts in Liechtenstein and Switzerland are also investigating the bank over suspicions it helped clients evade taxes.

The latest revelation is yet another blow for the reputation of UBS which yesterday said it had lost a record Sfr11.54bn (£5.6bn) in the first quarter and would axe 5,500 jobs, including 2,600 in its stricken investment banking division. It has been forced to write down Sfr37bn in assets.