On Monday, the Paris Criminal Court will continue hearings in the whistleblower case against UBS’s French division, where the bank faces accusations of harassing whistleblowers Nicolas Forissier and Stéphanie Gibaud. The trial, stemming from allegations of tax evasion that date back over 15 years, has significant implications for both whistleblowers, who suffered professional repercussions after reporting UBS’s misconduct. The outcome may affect UBS’s financial penalties and the whistleblowers’ civil claims for damages.
Overview of the UBS Whistleblower Case
On Monday, the Paris Criminal Court is set to convene for its third session regarding the case brought by the French state against UBS’s French division. The public prosecutor has lodged complaints accusing UBS of harassing two whistleblowers, Nicolas Forissier and Stéphanie Gibaud. This trial commenced on December 3 and has attracted significant attention.
Whistleblower Actions and Consequences
The allegations against UBS, previously known as UBS France, trace back over 15 years. During this time, both Gibaud and Forissier independently initiated investigations by French authorities into the bank. Forissier, who was the internal audit manager, uncovered dubious transactions related to cross-border dealings with French clients.
In 2008, he submitted a whistleblower report highlighting that UBS had established a tax evasion scheme, where Swiss bankers were illegally traveling to France to recruit clients. Simultaneously, Gibaud grew suspicious when she received an oral directive in June 2008 to erase all her client lists, which documented participants and private bankers from exclusive events she had organized for eight years. Refusing to comply, Gibaud reported her concerns to the labor inspectorate after noticing data missing from her computer. Following their reports, the French banking regulator began to scrutinize Gibaud’s situation.
Both whistleblowers believed they acted correctly, convinced that failing to report these incidents would have constituted a wrongdoing on their part. While UBS faced charges and was ultimately convicted by France’s highest court for unlawfully recruiting clients and laundering money from tax fraud, the personal repercussions for Forissier and Gibaud were severe.
Forissier was dismissed and did not receive his bonus, leading to difficulty in securing new employment. Gibaud, on the other hand, remained with UBS for another three and a half years before her termination in early 2012. In her book, “The Woman Who Knew Too Much,” Gibaud recounts her experience of workplace isolation, stemming from her refusal to delete client lists.
The allegations of harassment faced by both whistleblowers are currently under judicial review. UBS may face a fine of up to 75,000 euros payable to the French state. The trial is particularly sensitive, as both Gibaud and Forissier filed civil lawsuits against UBS for millions in damages shortly after their dismissals. Although Gibaud received 30,000 euros from the labor court, Forissier’s case remains on appeal, pending the outcome of the ongoing criminal proceedings. A ruling against UBS for bullying could potentially bolster his civil claim.
Publicly reinstated, Forissier was honored as a Knight of the French Order of Merit by President Emmanuel Macron in June. Given the ongoing legal proceedings, UBS has refrained from commenting on the case but is vigorously defending itself against the allegations. The bank insists on maintaining a clear distinction between the current bullying allegations and previous cases related to tax evasion.
However, the presiding judge has expressed a desire not to completely sever the connections between the two cases, questioning the current head of UBS France on whether Forissier’s actions played a role in the conviction of UBS AG for tax evasion and money laundering. The response from the UBS representative focused solely on the bullying allegations.
While the tax dispute remains unresolved, the Court of Cassation has upheld the judgment against UBS, though it has directed the lower court to reassess the penalties, which include a staggering 1 billion euros in fines, 800 million euros in damages to the state, and an additional fine of 3.7 million euros. UBS is hoping for a reduction in these penalties. The bullying case is expected to conclude next Wednesday, with the verdict anticipated a few months thereafter.