U.S. grand jury indicts Weil; Hoekstra has assumed Weil's responsibilities. Raoul Weil, global head of UBS' wealth-management and business-banking segments, is leaving the Zurich-based bank following his indictment by a Florida grand jury for conspiring to defraud the U.S. government. He is charged with helping UBS private clients avoid taxes by hiding in Swiss bank accounts assets the U.S. has deemed subject to U.S. taxation.

Weil "has determined that, in the interest of the firm and its clients, and in order to defend himself, he will relinquish his duties at this time pending the resolution of this matter," UBS says in a press release.

Marten Hoekstra, deputy head of UBS Global Wealth Management and head of the bank's U.S. wealth-management business, has assumed Weil's duties.

Another nail

The Florida indictment, which stems from a U.S. Justice Department investigation begun early in 2008, charges Weil and other unnamed UBS employees with helping approximately 17,000 U.S. taxpayers hide U.S.-taxable assets of from the IRS.

Weil's attorney, speaking from Switzerland, said the charges against his clients are "totally unjustified," according to a Reuters report.

This past July, with the Justice Department investigation well under way, UBS said it would stop "providing cross-border private banking services to US-domiciled clients through its non-US regulated units."

Weeks before that announcement, former U.S.-based UBS banker Bradley Birkenfeld pleaded guilty to helping Igor Olenicoff, an Orange County, Calif.-based real-estate developer, hide $200 million in assets from U.S. tax authorities. Birkenfeld is now cooperating with U.S. investigators.

Even though UBS' offshore wealth-management business with U.S. clients accounts for only about 2% of its total private-banking assets, the indictment of its top executive is seen as additional bad news for a bank that has this year had to take nearly $50 billion in writedowns as a result of bad bets on mortgage-backed securities.

UBS' ADR, down nearly 72% for the year at yesterday's close, was down another 6% in intraday trading today -- though that came amid a selloff.

Weil replaced Marcel Rohner as head of UBS' wealth-management business in July 2007 when Rohner replaced Peter Wuffli as CEO of the whole bank.

Before that, Weil oversaw UBS' non-Swiss wealth-management operations. He began his career with Swiss Bank Corporation (SBC) in 1984, initially in portfolio-management systems development, then as a private-banking executive.

SBC merged with Union Bank of Switzerland to form UBS in 1998. -FWR

Purchase reproduction rights to this article.