News of the Competition

MADISON, Wis. (5/16/08)

• U.S. prosecutors plan to serve Swiss powerhouse UBS AG with a broad subpoena for the names of wealthy Americans who may have used the bank's services to avoid income taxes, say people involved in the case. On Tuesday, former UBS private banker Bradley Birkenfeld and Liechtenstein businessman Mario Staggl were indicted in Florida federal court for allegedly helping UBS clients hide their assets in Swiss and Liechtenstein accounts. Birkenfeld pleaded not guilty. Staggl, who is believed to be in Liechtenstein, has not responded to the indictment. In December, California real-estate developer Igor Olenicoff, a client of Birkenfeld and Staggl, pleaded guilty to filing a false 2002 tax return. He agreed to cooperate with investigators (The Wall Street Journal Online May 15) ...

• Directors and officers of mortgage-lender Countrywide Financial must face a lawsuit by shareholders that accuses them of insider trading and of failing to monitor the lending policies that prompted the firm's collapse, according to a ruling by Judge Mariana R. Pfaelzer of the Federal District Court in Los Angeles. Rejecting the claims of executives and directors that they weren't aware of the lax loan practices, Judge Pfaelzer said confidential witness testimony suggest "a widespread company culture that encouraged employees to push mortgages through without regard to underwriting standards." The Arkansas Teacher Retirement System is a lead plaintiff in the suit. "We are pleased with the court's ruling, as it enables the shareholders to move forward with our case and remedy this wrong," said Christa Clark, chief legal counsel for the retirement system (The New York Times May 15) ...

• The nation's largest financial institutions say online and mobile banking will be the top priorities for product development during the next two years, according to a survey by Aite Group. Those priorities were cited by 23 of the 80 biggest financial institutions polled. In addition, 65% of respondents said they will target expedited bill payment as a top priority, and 61% said they will make pre-approved, special offers to online customers a priority. Nick Holland, a senior analyst for Aite Group, said banks also are interested in the "Holy Grail" of mobile banking--the phone as a payment device. However, he said banks may have to wait at least three to five years for that capability (MarketWatch May 15) ...

• Bank of America and Wells Fargo on Thursday announced the formation of a joint venture to operate a single, combined automated clearinghouse (ACH) platform for the banks and their clients. Pariter Solutions will become the nation's largest ACH payment processor. Operations are expected to begin late next year. Bank of America and Wells Fargo top the rankings in ACH payments, according to the Electronic Payments Association (NACHA). Bank of America is first for receiving payments, while Wells ranks second. Bank of America ranks second for originations, and Wells ranks third. Almost 14 billion ACH payments were made last year, according to NACHA (/PRNewswire-FirstCall/ May 15) ...