Julius Baer allocates $ 80 million to settle Fifa corruption case
Julius Baer has set aside nearly $ 80 million after reaching a deal with the US Department of Justice over the regulator’s investigation into corruption at Fifa, the governing body of world football.
The Swiss private bank has sought to end its involvement in a spate of international money laundering scandals, which would allow it to pursue transformative mergers and acquisitions as early as next year.
Julius Baer said on Monday that he had taken a provision of $ 79.7 million to settle the DoJ’s investigation into his role in the Fifa affair, which also includes a three-year deferred prosecution agreement. Shares of the lender rose just under 3 percent in morning trading.
Julius Baer’s involvement in the Fifa affair and another alleged corruption case involving Petróleos de Venezuela (PDVSA), a state-owned oil and gas group, led the Financial Markets Supervisory Authority, the Swiss regulator , at ban banking for making significant transactions in February.
Julius Baer’s chief executive Philipp Rickenbacher and chairman Romeo Lacher have said in recent weeks that they hope Finma will lift restrictions next year and the bank may continue with acquisitions.
“The deal with the US Department of Justice on the Fifa case is the next step for Julius Baer to close the remaining regulatory and legal issues,” said Andreas Venditti, analyst at Vontobel. “In light of President Lacher’s statements in the weekend press, Julius Baer is once again on the lookout for potentially significant M&A deals.”
The Fifa case involves Jorge Luis Arzuaga, an Argentinian who worked for Julius Baer, who pleaded guilty in federal court in Brooklyn, New York, in 2017 for facilitating payments from a sports marketing company to officials of Fifa.
The DoJ’s investigation peaked in 2015 and led to the resignation of longtime FIFA president Sepp Blatter.
Julius Baer said he has been cooperating with the DoJ since 2015 and has already taken steps to reduce business risk, including reassessing its relationships with clients, which has led to some accounts being closed. It also introduced a code of ethics and business conduct.
Last month, the Financial Times revealed that the bank was hold back millions bonus francs from its former directors Boris Collardi and Bernhard Hodler in connection with the PDVSA affair.
Separately, Julius Baer has been ordered by Switzerland’s highest court in September to return 150 million Swiss francs ($ 160 million) that had been embezzled by a notorious East German agent following the fall of the Berlin Wall.