Reuters logo
UBS says Goldman-backed rival lured staff illegally
August 1, 2008 / 7:44 PM / 10 years ago

UBS says Goldman-backed rival lured staff illegally

LONDON (Reuters) - Swiss bank UBS AG UBSN.VX told London’s High Court that rival start-up Vestra Wealth, backed by U.S. bank Goldman Sachs (GS.N), had illegally poached its staff and gained a headstart in attracting its clients.

On Friday, UBS sought a “springboard” injunction against Vestra after 75 of UBS’s wealth managers resigned for the start-up since May. Vestra is 20 percent-owned by Goldman and was set up by UBS’s former top private banker in Britain David Scott.

The injunction, if granted, would stop Vestra from soliciting or dealing with any of UBS’s clients and remaining employees until October, when a trial can be held.

Vestra’s lawyers said a springboard injunction would resulting Vestra and UBS missing out on business because those UBS clients wishing to change would leave UBS but would not be able to move to Vestra.

The judge is due to make a decision on Monday.

Goldman officials were not immediately available for comment.

UBS is also suing four senior employees departing for Vestra for what it said was a secret plot to encourage more UBS staff to move to Vestra and to take their clients with them.

“The enormity of the damage created by those wrongs has to be met with an order that is going to be effective ... to prevent Vestra from reaping the fruits of its wrongs,” UBS’s lawyer Alistair McGregor told the court.

Last month, a senior UBS executive said the bank, which has been accused of helping some U.S. clients to evade taxes, would stop offering cross-border private banking through its unregulated units to U.S.-domiciled customers.

Vestra said UBS employees had left for the start-up, alongside recent departures for other competitors, because of dissatisfaction with the state of UBS’s business and denied that there was an illegal plan to poach UBS staff and clients.

“There are no grounds for preventing Vestra from competing for the business of UBS’s clients. UBS’s actions are designed to destroy the business that I have created,” Scott said in a statement.

UBS Wealth Management in Britain has around 300 client advisers and roughly 37 billion pounds ($73.38 billion) in invested assets.

Editing by Toni Reinhold

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below