Switzerland-based lender UBS agreed to $1.435 billion to settle fraud costs relating to the sale of residential mortgage-backed securities (RMBS), the U.S. Justice Department mentioned Monday.
The settlement resolves the final excellent case introduced by federal prosecutors towards main banks within the wake of the monetary calamity, an initiative which has garnered $36 billion in settlements from practically 20 monetary establishments, a Department of Justice (DOJ) press launch mentioned.
In its civil case launched in 2018, the DOJ argued that UBS “knowingly made false and misleading statements” in reference to the sale of 40 residential mortgage-backed securities (RMBS) issued in 2006 and 2007.
The DOJ had alleged that opposite to UBS representations, the enormous Swiss financial institution “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 mentioned.
“With this resolution, UBS will pay for its conduct related to its underwriting and issuance of residential mortgage-backed securities,” mentioned Breon Peace, US Attorney for the Eastern District of New York.
“The substantial civil penalty, in this case, serves as a warning to other players in the financial markets who seek to unlawfully profit through fraud that we will hold them accountable no matter how long it takes,” he added.
UBS characterised the case as a “legacy matter,” including in an announcement that the funds have been provisioned for in earlier intervals.
Source: www.dailysabah.com
