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Briefs (right)

UBS Sells Three Private
Banks to Julius Baer

By Tom Wright

UBS, Switzerland’s largest bank, announced Monday that it had sold its three private banks and its asset management unit to Julius Baer, the largest publicly traded private bank in Switzerland, for $4.6 billion.

But analysts said the sale was unlikely to spur more of the consolidation that some say is needed in Switzerland’s crowded private banking industry.

UBS said in a statement that it would receive about $3.1 billion in cash for the sale and would take a 21.5 percent stake in Julius Baer, making it the largest shareholder of the private bank.

Julius Baer will finance $2 billion of the deal through an equity rights sale, UBS said. Julius Baer will remain small in terms of assets compared with the private banking operations of UBS or Credit Suisse, Switzerland’s second largest bank, even after taking over the UBS units — Banco di Lugano, Ehinger & Armand Von Ernst and Ferrier Lullin — and the asset management company GAM.

Analysts say Julius Baer should be big enough to remain independent.

“With this deal, Julius Baer has defended itself from being taken over,” said Ray Soudah, chairman of Millennium Associates, a consulting firm for private banks.

Australia Court Rules Against
File-Sharing Network Kazaa

By Wayne Arnold

An Australian court ruled Monday that the popular file-sharing network Kazaa violated Australian music copyrights and ordered the company to modify its software to help prevent it.

“The respondents authorized users to infringe the applicants’ copyright in their sound recording,” Murray R. Wilcox, a federal judge in Sydney, wrote in a summary of his judgment. “The respondents have long known that the Kazaa system is widely used for the sharing of copyright files.”

The ruling culminates an 18-month legal battle between the recording industry and the Australian-based owners of Kazaa, who said they planned to appeal. The ruling also complemented a U.S. Supreme Court ruling in June that Internet file-sharing companies like Kazaa could be held liable for copyright piracy.

The Australian ruling was broadly consistent with a ruling by the U.S. Supreme Court in June that the makers of the file-sharing services Grokster and Morpheus could be held liable for contributing to the infringement of copyrights. The Supreme Court also rejected the argument that file-sharing services should be protected if they have some legitimate uses and sent the case back for trial to look at whether they encouraged users to steal copyrighted material.