U.S., Swiss seek delay in UBS secrecy case about tax evasion

— -- Justice Department prosecutors and UBS on Sunday asked a federal judge to postpone an internationally watched trial scheduled for Monday and give them more time to seek a settlement of Washington demands that the Swiss banking giant turn over the names of 52,000 wealthy U.S. clients suspected of tax evasion.

Saying they want "to continue their discussions seeking a resolution of this matter," the joint motion asked U.S. District Judge Alan Gold in Miami to reschedule the evidentiary hearing for Aug. 3 if an agreement is not reached. The filing marked the first time the two sides publicly acknowledged settlement negotiations.

The legal battle has strained relations between the U.S. and Switzerland, cracked Switzerland's reputation for banking secrecy and shaken the private banking industry as it spotlighted an estimated $100 billion in annual tax evasion by Americans using offshore accounts.

There was no immediate ruling by Gold. Federal courts, however, typically grant joint adjournment requests in civil cases.

Federal prosecutors simultaneously increased pressure on UBS with a court filing that raised the prospect of stiff financial penalties or other action if the bank continues to fight a summons seeking the client data.

"If the court orders compliance with the summons, and if UBS defies that order, it is the intention of the United States to ask the court to take appropriate steps to enforce its order and vindicate its authority. This would include asking the court to hold UBS in contempt and to impose monetary sanctions sufficient to bring UBS into compliance," said a legal memo filed by federal prosecutors.