Ethics and governance in the European Financial centers

I have analysed in the previous article that the Operating Memorandum (OPMEM) that quotes Madoff over 20 times should not exonerate a collective responsibility in Luxembourg because of the so-called "relevant input" of professionals in the drawing up of laws and regulations that actually opened and facilitated the drift with Madoff.

I would like to lay emphasis on the consequences that result from the public disclosure in the media of an internal document that was not intended to circulate outside the bank.

UBS is a PSF (Professional of the Financial Sector) that is regulated by CSSF. The PSF statute requires confidentiality i.e. respect of professional secrecy (Cf. article 61-22 of law of 5 April 1993 as amended). Because of the disclosure in the media of an internal document that was not intended to circulate outside the bank, there is a reputational risk for UBS.

If I were UBS I would lodge a criminal complaint and file of a civil action.

The key questions to investigate are:
1. Who circulated the OPMEM outside the bank?
2. Did this person inform UBS he/she had the document outside the bank
3. If yes, when (statute of limitation?)?

Anyway the courts should disregard the OPMEM should an investor want to use it against UBS and even stop the procedure because of the principle "criminal law supersedes over civil laws".

Luxembourg as a jurisdiction, after the episode of prosecutions for the disclosure of internal documents in the framework of the Clearstram affair early 2000s, cannot accept the use of the OPMEM against UBS. Even though it is a seducing opportunity to discharge the collective responsibility in the jurisdiction for the so-called "relevant input" of local professionals in crafting laws and regulations.

A very interesting games theory case study...