US files fraud lawsuit against UBS

The United States government has filed an expected civil fraud lawsuit accusing UBS, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-09 global financial crisis. The move, which came late on Thursday, Swiss time, had been anticipated. UBS has already said it would “vigorously” contest the lawsuit. UBS is accused of misleading investors about the quality of more than $41 billion (CHF41 billion) of subprime and other risky mortgage loans backing 40 securities offerings in 2006 and 2007, the Department of Justice (DOJ) said in a complaint filed with the federal court in Brooklyn. While UBS was not a big originator of US residential home loans, US Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell, Reuters reported. UBS statement In a statement, issued before the US ...
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