Word: swiss
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Dates: during 1960-1969
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...Responsibility. Numbered accounts are particularly handy for circumventing U.S. securities laws. To get around the restrictions on trading by "insiders," for example, corporate officers sometimes buy or sell stock in their own companies through Swiss banks. Other U.S. investors use the banks to sidestep margin requirements. The Government estimates that all foreign banks -in Panama, Nassau and West Germany as well as in Switzerland-account for at least 8% of the transactions on the New York Stock Exchange. In singling out Switzerland, U.S. officials seemed most disturbed about their lack of precise knowledge about all that may be going...
...neutrality of its politicians. Numbered accounts were introduced in the 1930s to thwart Nazi Germany from hunting down assets hidden abroad by its citizens, mostly German Jews. As a rule, only one or two top bank officers know the identity of holders of such accounts. Under Swiss law, those who do know have a "duty to observe silence of professional secrecy." Otherwise they face a fine of up to $5,000 and six months in jail...
...Swiss bankers admit that numbered accounts have been exploited, but they put most of the blame on the 100 or so foreign-owned banks in their country and only a handful of small, Swiss-owned institutions. They insist that, contrary to legend, the biggest banks do not cater to South American dictators or Mafia magnates. Moreover, the overwhelming majority of the thousands of numbered accounts belong to Europeans rather than Americans...
Ingenious Americans exploit numbered Swiss accounts in innumerable ways. Here are three that particularly disturb U.S. Attorney Robert Morgenthau...
...STOCK TRADING: Many U.S. investors use secret accounts to play the stock market, cabling or mailing instructions to their Swiss banks to buy and sell securities through brokerage houses in New York. Another trick is to phone a New York broker designated by a Swiss bank and use a code name to place an order. The broker executes the order for the account of the Swiss bank and winds up with no record of the real buyer's identity. Since foreign banks are not taxed at all on trading profits-and at a maximum rate of only...