You are here: Home » Reuters » News
Business Standard

UBS expects to be sued by U.S. Justice Dept over crisis-era mortgage securities


By Karen Freifeld

(Reuters) - Group AG, Switzerland's largest bank, said it expects to be sued by the as early as Thursday on civil charges related to the sale of mortgage-backed securities in the run-up to the 2008 global financial crisis, according to a company statement.

The said the claims were not supported by the facts or the law and it would contest any such complaint "vigorously."

The did not immediately respond to a request for comment.

said the advised the that it intends to file the lawsuit. It anticipates the will seek unspecified monetary penalties stemming from which date back to 2006 and 2007.

The lawsuit against UBS, a small originator of U.S. residential mortgages at the time, is among the last actions over misconduct in the sale and pooling of which helped to cause the financial crisis.

In recent years, the has settled similar claims with Citigroup Inc, Deutsche AG, JPMorgan Chase & Co, Credit Suisse Group AG, Morgan Stanley, Group Inc, Corp and Plc.

settled for $2 billion in March after resisting a penalty the sought near the end of the in 2016. Justice had sought a much higher fine at the time and, when the two sides could not come to terms, the department filed a lawsuit.

More recently, agreed to pay $765 million in October to settle with the Justice Department over its sale of defective before the crisis, while major player reached a $4.9 billion deal in May.

After the crisis, banks were accused of deceiving investors about the quality of loans underlying the mortgage-backed securities they pooled and sold, with loans made to borrowers with no ability to repay them and based on inflated home appraisals.

UBS, which originated $1.5 billion of U.S. residential mortgages in a $5 trillion market, lost more than $45 billion when the housing market collapsed, a person familiar with the matter told

(Reporting by in New York; Editing by and Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, November 08 2018. 13:59 IST