Swiss banking giant UBS AG is once again in the global spotlight after reports surfaced suggesting that the bank may still hold assets connected to Jewish families whose wealth was confiscated during the Nazi regime. Investigative journalism by Eric Frey in Der Standard (link), Riva Pomerantz in Ami Magazine (link), and Peter Hell in BILD (link) have revealed archival evidence pointing to accounts that may never have been fully reconciled. The revelations have serious implications for Gulf investors who rely on UBS to manage billions in sovereign, family, and private assets.
Uncovering Decades-Old Accounts
Dr. Gerhard Podovsovnik, Vice President of AEA Justinian Lawyers, told the Abu Dhabi Times that archives recently discovered at Credit Suisse, now part of UBS, contain thousands of documents describing accounts excluded from the 1990s Korman Settlement. These include ledgers, correspondence, and internal bank memos suggesting interest and fees were applied without restitution to rightful heirs.
“Swiss banks, including UBS, never completed their historical obligations,” Podovsovnik explained. “This is not merely a question of history; it directly impacts modern governance, compliance, and investor trust.”
Podovsovnik emphasized that these findings contradict UBS’s public statements that all Nazi-era accounts were resolved, creating a potential opening for U.S. legal action and renewed scrutiny of the bank’s operations globally.
Risks and Responsibilities for Gulf Investors
The U.S. legal doctrine of fraud on the court allows courts to reopen settlements if evidence shows that parties misrepresented facts. In this case, UBS could be compelled to disclose historical records, provide access to archives, and submit to forensic review of off-balance-sheet accounts.
“This is extremely relevant for Gulf investors,” Podovsovnik noted. “UBS manages billions of dollars in assets for sovereign funds, royal family offices, and high-net-worth private clients in Abu Dhabi, Dubai, Qatar, and Saudi Arabia. Historical liabilities left unresolved could affect operational integrity and portfolio security today.”
The controversy also involves UBS’s acquisition of Basler Handelsbank, a Swiss bank with documented ties to Nazi Germany. By absorbing Basler Handelsbank, UBS inherited both assets and long-standing obligations, including dormant accounts and extensive archival material. Podovsovnik emphasized the necessity of independent expert review to fully assess risks and ensure transparency.
For Gulf investors, this situation underscores the importance of demanding accountability and full disclosure from UBS. The potential for U.S. litigation could reveal not only historical account issues but also current risks, compliance gaps, and operational vulnerabilities affecting portfolios worth billions.
“Transparency is essential,” Podovsovnik concluded. “Middle Eastern investors must proactively ensure that UBS meets the highest standards of disclosure and accountability. Protecting wealth today requires clarity about the past.”
The UBS case illustrates the ongoing influence of historical banking practices on modern financial governance, highlighting the critical need for Gulf investors to actively monitor both legacy and current operations to safeguard their investments.
