UBS to pay US $1.43 billion for alleged fraud over residential mortgage-backed securities

Photo by Guilhem Vellut/ Flickr/ (CC BY 2.0)

Banking group UBS and many of its U.S.-based affiliates agreed to pay $1.43 billion in penalties to settle a civil action alleging fraud in the sale of residential mortgage-backed securities, the company and the Justice Department said on Monday.

The civil action was filed in November 2018 alleging misconduct related to UBS’ underwriting and issuance of residential mortgage-backed securities (RMBS) issued in 2006 and 2007, according to the Justice Department.

The United States had filed a complaint alleging that UBS defrauded investors in connection with the sale of 40 RMBS issued in 2006 and 2007. It alleged that UBS knowingly made false and misleading statements to buyers of those securities.

UBS on Monday said it reached the deal with the Justice Department to settle what the bank called a legacy matter from 2006-07. It added that the settlement was fully provisioned in prior periods.

The settlement resolves the last case brought by a Justice Department working group dedicated to investigating conduct of banks and other entities for their roles in creating and issuing RMBS leading up to the 2008 financial crisis, the Justice Department said.

Source: Yahoo Finance

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