Russian-Uzbek billionaire Usmanov sues UBS in Frankfurt for unsubstantiated reports

Wikimedia Commons/CC BY-SA 3.0 Author: Alte_Oper_Frankfurt_&_UBS_Abend.jpg: Pedelecs
UBS Financial Services (left) in Frankfurt, 2012.

On June 7, 2024, Russian-Uzbek billionaire Alisher Usmanov filed a lawsuit against UBS Europe SE (formerly UBS Deutschland AG) with the Frankfurt am Main Regional Court in Germany. The lawsuit alleges that UBS sent unsubstantiated reports about alleged suspicious financial transactions by Usmanov to German financial authorities between 2018 and 2022. According to his lawyer, these reports resulted in a politically motivated investigation against Usmanov, leading to significant economic losses and damaging his reputation as a philanthropist and former businessman.

In 2022, Mr. Usmanov was unjustly investigated in Germany, leading to theatrical searches for his properties. However, in May 2023, the Frankfurt Regional Court ruled these searches unlawful and baseless. Despite the court’s decision, the prosecution did not comply, leading to Mr. Usmanov’s lawyers filing a criminal complaint. In March 2024, pre-investigation probes were initiated against two high-ranking prosecutors.

The essence of the claim is that between 2018 and 2022, the bank sent more than a dozen absurd and unsubstantiated, if not knowingly false, reports to the Financial Intelligence Unit of the German General Directorate of Customs on allegedly suspicious transactions by Mr. Usmanov (for example, reports suggesting “money laundering” in cash withdrawals, rent payments, etc.). The bank sent the reports without proving that the origin of the funds was related to a crime committed by the client. In a clear violation of the norms of the banking services agreement and banking secrecy, UBS breached the confidentiality of client data, spread misleading allegations about the client, and grossly violated the general personality right.

“As a first step, we have filed a lawsuit against UBS Europe SE Frankfurt on behalf of Mr Usmanov personally for the court to establish the fundamental facts and the bank’s liability for damages. We will, however, go further since, for now, the damages can be in no way assessed or ultimately determined. The Frankfurt am Main General Prosecutor’s Office, and the Council of the EU have issued numerous erroneous decisions for which UBS is partly responsible, in particular, due to the use of its suspicious transaction reports as an instrument for the purposes of criminal prosecution and EU sanctions policy. In view of this, and taking into account the damage to Mr Usmanov’s reputation and the value of the worldwide assets affected thereby, the effects for UBS may be “tsunami-like” in nature,” Dr Peter Gauweiler, the lawyer representing Usmanov, said in a statement on Monday.

Usmanov’s lawyer stressed that the significance of the Usmanov v. UBS case extends beyond a mere breach of the banking services agreement and banking secrecy. According to the lawyer, UBS played a part in the unlawful criminal prosecution of an innocent person and instigated the sanctioning of its client. It’s worth noting that the bank has exerted substantial efforts to onboard Mr Usmanov as a client since 2015, and its senior management has expressed “pride and gratitude” for the trust placed in UBS. UBS conducted a rigorous due diligence review of Mr. Usmanov’s identity, business activities, and the source of his assets, which took nearly six months to complete. The review concluded that there was “no evidence or lingering accusations to substantiate any wrongdoing.”

As of now, UBS has not issued any comment regarding the matter.

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