UBS to pay $1.44 billion to settle 2007 financial crisis-era mortgage fraud case, last of such cases
UBS will pay U.S. authorities $1.44 billion to settle the last lingering legal case over Wall Street’s role in the housing bubble of the early 2000s, which ultimately led to the 2008 financial crisis and Great Recession
NEW YORK (AP) — UBS will pay U.S. authorities $1.44 billion to settle the last lingering legal case over Wall Street's role in the housing bubble of the early 2000s, which ultimately led to the 2008 financial crisis and Great Recession.
The Swiss bank agreed to pay a civil penalty over how it handled the sale of 40 mortgage-backed securities issued in 2006 and 2007. The settlement argues that UBS bankers gave false and misleading statements about the health of the mortgages in those bonds to the buyers in violation of federal securities law.
For example, UBS bankers knew that the underlying mortgages in these bonds were poorly underwritten or violated consumer protection laws. The bonds in question ended up with substantial losses for investors.
With the UBS settlement, the last remaining outstanding legal case from the Great Recession has now come to a close, the Justice Department said. Banks paid collectively more than $36 billion in civil penalties for their conduct related to the mortgage crisis, but that does not include other settlements that banks have made to state and local authorities as well.
