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Financials

UPDATE 1-UBS Germany operations probed by regulator

* German market watchdog probes UBS German operations#

* Probe follows investigation by state prosecutors

* Probe centers around charges brought by former client

(adds details, background)

FRANKFURT, April 1 (Reuters) - German market regulator BaFin has initiated a probe against the German operations of Swiss bank UBS UBSN.VX, a UBS spokeswoman said on Thursday.

UBS declined to detail the nature of the probe but acknowledged it was related to a separate investigation initiated in February by Frankfurt prosecutors, which probed UBS German operations for fraud, breach of fiduciary trust and tax evasion. [ID:nLDE61A1RR]

“We confirm that BaFin has initiated a special probe in connection with the issues raised by Peter S. UBS Germany is of course cooperating with BaFin,” UBS Germany said in a statement, referring to the client who brought charges against UBS.

UBS has also launched an internal investigation of the matter, the bank said.

BaFin and Frankfurt prosecutors could not be reached for comment.

In February Frankfurt prosecutors said a former UBS client filed a case “against those responsible” on tax questions.

UBS in February said, “the case in Germany has been in process since 2008. UBS Germany rejects the client’s previous demand for the return of his investment losses.”

“UBS has opened an internal investigation into the additional accusations about tax questions and domicile and will review the events of that time. Should these accusations be proven true, the new leadership of UBS will take appropriate measures.”

Reporting by Edward Taylor in Frankfurt and Martin de Sa’Pinto in Zurich +49 69 7565 1187; edward.taylor@thomsonreuters.com

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