NEW YORK: UBS will pay $1.4 billion to settle US charges that it defrauded investors in the sale of mortgage-backed securities central to the 2008 financial crisis, the Justice Department announced Monday.
The agreement resolves the last outstanding case brought by federal prosecutors against major banks in the wake of the financial calamity, an initiative which has garnered $36 billion in settlements from nearly 20 financial institutions, a Department of Justice (DOJ) press release said.
In its civil case launched in 2018, the DOJ had argued that UBS “knowingly made false and misleading statements” in connection with the sale of 40 residential mortgage-backed securities (RMBS) issued in 2006 and 2007.
The DOJ had alleged that contrary to UBS representations, the giant Swiss bank “knew that significant numbers of the loans backing the RMBS did not comply with loan underwriting guidelines that were designed to assess borrowers’ ability to repay.”
Ultimately the 40 RMBS “sustained substantial losses,” the DOJ said.
“With this resolution, UBS will pay for its conduct related to its underwriting and issuance of residential mortgage-backed securities,” said Breon Peace, US Attorney for the Eastern District of New York.
Comments
Comments are closed.