<http://online.wsj.com/article/SB123518867339639783.html?mod=djemITP#printMod...
The Wall Street Journal FEBRUARY 21, 2009 The Politics Of Hiding Cash Loss of Financial Privacy Predates the UBS Case; Post-9/11 Rules, the Web Not long ago, a rich person in the U.S. could be secure with the knowledge their finances were, if not top secret, at least private. Banks rarely asked questions. If you had a closely held company, few could determine your net worth. Those who had overseas accounts in tax havens such as Switzerland or Liechtenstein knew banks there wouldn't give up names. So this week's news that UBS would be giving to the Internal Revenue Service names of Americans with accounts at the Swiss bank and that the U.S. seeks even more no doubt sent a shock through the financial world. The rich, especially the older rich, will bemoan the end of the great refuge for secret stashes. The private-banking world will have the difficult job of convincing wealthy clients that their names and accounts are safe. Yet it is merely the latest example of a longer trend -- the rich are losing their financial privacy. The post-9/11 "know your client" rules forced U.S. banks to ask more questions of clients and their sources of funds. Crackdowns on overseas accounts by the IRS in the past decade have limited the business of bank havens from rich Americans. The Internet and legal system have combined to spread all manner of newly available information about a person's net worth and investments. How many Madoff investors ever expected not only to lose their money but also to be outed publicly for doing so? In short, wealth no longer is a big secret -- or at least it isn't as secret as it once was. As one private banker once told me: "When it comes to offshoring and shelters, my advice to my clients is simple: How would it look if The Wall Street Journal wrote about it? If you wouldn't be embarrassed, it's OK to do." Robert Frank, The Wealth Report