Swiss party urges tax fraud probe on ex-UBS chiefs

ZURICH (Reuters) - The Swiss Social Democrat party (SP) has asked a judge to investigate whether former UBS chairmen Marcel Ospel and Peter Kurer were aware of tax fraud on behalf of the banks' clients.

Switzerland and the United States agreed on an out-of-court settlement of a U.S. law suit against UBS this week that will spare the bank a tax trial in the United States, most likely in exchange for disclosing thousands of UBS client names to U.S. tax authorities.

The SP claimed on Friday the likely transfer of such a big number of client names indicated UBS might have systematically helped clients to defraud tax authorities.

The party, which came second in the 2007 parliamentary election with 19.5 percent of the vote, asked a judge to carry out an investigation.

"The transfer of bank client data from Switzerland is only (legally) possible in a case of tax fraud," Andreas Kaesermann, spokesman for the SP, said on Friday.

A spokesman for Kurer said in an emailed statement the claims the party was making had been assessed previously by various Swiss and foreign authorities, which had concluded "that the accusations against Mr. Kurer are unfounded."

A UBS spokeswoman declined to comment. Reuters could not contact Ospel.

Ospel and Kurer, both former UBS chairmen, resigned in quick succession as the bank struggled to cope with fallout from the subprime crisis and the U.S. tax probe.

UBS and its top management have been the target of popular anger in Switzerland, in particular after the state rescued the bank with a 6 billion Swiss franc cash injection after its subprime binge.

The U.S. and Switzerland have not released details of the UBS settlement, but the Swiss government has said the agreement will be in line with existing Swiss law regarding the sharing of bank client data with foreign tax authorities.

Tax fraud is defined in Switzerland as actively trying to find ways to conceal assets, while not reporting financial income is a minor, non-criminal offence.

The Swiss state owns 9 percent of UBS and has always said it wants to sell its holdings as soon as possible.

(Reporting by Lisa Jucca; editing by John Stonestreet and Sitaraman Shankar)