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Poking a Few Holes in Swiss Bank Secrecy: UBS AG (USA) (UBS)

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On this day in economic and financial history …

On Feb. 18, 2009, Swiss banking giant UBS AG (USA) (NYSE:UBS) reached a deal with the U.S. Justice Department over a major tax tussle. As part of the deal, thee bank agreed to pay $780 million in fines, penalties, and restitution, and also agreed to hand over the names of some of its 19,000 American customers suspected of evading their taxes with foreign accounts. This came after Swiss banking officials had given the go-ahead for cooperative disclosure, a rare step in a country that prides itself on protective banking rules. The IRS, in tandem with the Justice Department, also offered to waive prosecution in exchange for “voluntary disclosure” of any hidden taxable assets.

UBS AG (USA) (NYSE:UBS)This settlement was a major blow to UBS, which had used its secrecy as a key marketing tool with affluent Americans. It also emboldened the government to press for a more open relationship with Swiss banks. The government would gain this a year later with a landmark deal, approved by Swiss authorities, to provide data on request regarding suspected U.S. tax cheats. While few accounts were at risk, it still represented a positive step toward transparency in a nation long seen as a tax haven by the global elite.

What took you so long?
On Feb. 18, 1971, the New York Stock Exchange first incorporated as a not-for-profit corporation. It had been in operation since 1792, when a group of stockbrokers created it with an agreement underneath a buttonwood tree on Wall Street. The venerable organization had been membership-only for its entire history, and the only way to gain membership was to buy one of 1,366 seats, which were coveted by stockbrokers and financial firms alike.

The NYSE incorporated during a time of rapid transformation in the securities industry. The Nasdaq exchange had opened only 10 days earlier, introducing electronic trading to a world accustomed to the old-fashioned phone-call brokerage system. By the end of the decade, the NYSE had implemented a number of electronic automation processes, and volume on the NYSE increased roughly fourfold by 1979. The exchange would continue to operate as a not-for-profit until 2006, when it merged with Archipelago, often known as ArcaEx, and became a publicly traded corporation currently known as NYSE Euronext (NYSE:NYX).

Not much of a red carpet for this one
The year was 1929. Stock market fever gripped the country. The Dow Jones Industrial Average hovered at 300 points and would soon make its final surge to the stratosphere. Americans everywhere were enjoying technologies their parents had never dreamed of, such as the automobile, the radio, electric everything … and the motion picture. In three decades, the motion picture had progressed from simple five-second videos of people sneezing to full-length epics like Charlie Chaplin‘s The Gold Rush and the visionary Metropolis. This growth prompted industry leaders to create awards that would honor the best and boldest people of the motion picture industry: the Academy Awards. On Feb. 18, 1929, the first awards were revealed to industry insiders on the back page of the Academy of Motion Picture Arts and Sciences’ internal newsletter.

The first awards were a far cry from the glamorous showmanship of the modern Oscars. The awards ceremony itself wouldn’t be held until May, at a lightly attended banquet in the Blossom Room of the Hollywood Roosevelt Hotel. The following year, the academy began sending the winner lists to the press the night before the ceremony, which morphed into the current practice of secret sealed envelopes in 1940. The first televised ceremony appeared in 1953 and has been a popular event ever since.

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