The woes of UBS continue. Next Monday, Bradley Birkenfeld the ex-UBS banker accused of aiding and abetting US clients to evade US taxation was due to appear in front of a Fort Launderdale, Florida court and to be invited to tell all to Judge William Zloch. But according to a Reuters report this morning, his appearance in court next week has been cancelled at the request of the US prosecutors with no new date set.

He was expected to reveal the names of his US clients (the largest of which was Oleg Olenicoff) which would put him in an interesting position with respect to the Banking Secrecy laws of Switzerland.

Mr Birkenfeld was hired by UBS from Barclays in 2001 and left in allegedly acrimonious circumstances in October 2005, UBS apparently being less than pleased with the results of his prospecting. The Swiss newspaper Le Temps reports that his eventual payout was significantly beneath that which he demanded. The UBS unit which dealt with US clients was dissolved in late 2007.

UBS has an internal directive dated November 2004 which places strict limits on the activities of staff dealing with US tax payers. That having been said, Le Temps has suggested that this directive did not reflect the actual activities of the bank in respect of US clients and there are suggestions that Mr Birkenfeld will allege active connivance in his activities on the part of his superiors. Martin Liechti, responsible for private banking in the Americas for UBS and the account manager’s boss has also been detained in the US as a witness.

At this stage UBS is not making any comments on the case. Was Mr Birkenfeld aware of the risks he was taking? Did he understand the laws, in particular those dealing with Qualified Intermediary activities? Did he receive appropriate advice and/ or training from UBS? These are questions that are, as yet unanswered. What is certain is that there is no love lost between UBS and Mr Birkenfeld. Accusations of various malpractices are flying in both directions.

In the end it is a messy affair from which neither Mr Birkefeld nor UBS are likely to gain. But the biggest losers in the end may well be banks with US exposure whatever their actual business practice. Anecdotal evidence heard by WealthBriefing in Geneva suggests that US and Canadian clients are moving assets to Swiss banks with no US offices or connections. And Swiss Banking secrecy seems just that little bit less certain in the light of these developments.