Ubs plunged more than 7% in premarket trading on Wednesday evening in Beijing. According to market sources, the U.S. Department of Justice is investigating Credit Suisse and is also looking for potential compliance problems at UBS. In June, UBS officially announced the completion of its acquisition of Credit Suisse.

Ubs's share price rose as much as 40 per cent in the third quarter because of the huge "negative goodwill" - the difference between the purchase price and the value of Credit Suisse's assets. But as UBS itself has said, look beyond the goodwill of the deal to the risks that follow.
And again... What happened?
The Justice Department is investigating Credit Suisse for helping wealthy Russians evade sanctions, according to people familiar with the matter. The matter began earlier this year when the Justice Department issued subpoenas to a series of banks, but has now become a full-blown investigation into Credit Suisse. In addition, the DoJ informed UBS of the matter when it completed the Credit Suisse acquisition in June. At the same time, the Justice Department is also investigating UBS for possible compliance problems.
People familiar with the matter stressed that the investigation was still in its early stages and did not necessarily lead to a court case or a cash settlement.
Ubs increased its wealth by a third to $4 trillion as Switzerland's top two banks merged. Also in the bag are Credit Suisse's legal troubles, which have led to the bank's troubles.
The Justice Department has asked banks for information on how they handled the accounts of sanctioned customers over the past few years, but has not yet conducted face-to-face depositions with bank executives or employees. Since 2014 alone, the United States has added thousands of super-rich Russians to its sanctions list.
Interestingly, from the DoJ's point of view, UBS's acquisition of Credit Suisse was also an opportunity to facilitate this investigation. The DoJ is understood to have sought the material directly from UBS rather than through diplomatic channels. Traditionally, Swiss agencies assisting foreign prosecutors go through the Swiss Federal Office of Justice. The Swiss Federal Office of Justice also confirmed to the media that it has not received any questions about UBS, Credit Suisse and Russian sanctions.
As a well-known Russian rich wealth management bank, Credit Suisse at its peak managed more than $60 billion of Russian rich assets. Even when that figure fell to $33bn in February last year, it was nearly half that of UBS, even though the latter had a much larger wealth management business.
In fact, before the DOJ's action, Credit Suisse had already been targeted for "helping U.S. clients hide assets" and had paid a $2.6 billion settlement on tax evasion charges. At the end of March, the US Senate Finance Committee also publicly said it had found "significant evidence" that Credit Suisse continued to help US clients evade taxes. At that point, of course, this was already UBS's problem.
The history of foreign banks being investigated by the US Department of Justice for "sanctions violations" also shows that if the charges are substantiated, they can lead to large fines. In 2014, French bank BNP Paribas paid an $8.97 billion settlement for violating sanctions against Sudan.
From another point of view, the move is also quite pressuring. According to industry groups, the Swiss banking system held nearly $200 billion of Russian wealth in March 2022. However, by the end of last year, the total amount of frozen Russian assets announced by Swiss officials was 7.5 billion Swiss francs.