Wednesday, August 07, 2013

UBS agrees to pay $50 million mortgage fine in US...

Switzerland's largest bank, UBS, has agreed to pay $50 million (CHF46 million) in the United States to settle federal civil charges of misleading investors in its sale of risky mortgage bonds before the 2008 financial crisis.

The Securities and Exchange Commission (SEC) announced the settlement with the bank's investment arm UBS Securities on Tuesday. The SEC said the bank failed to disclose that it had kept $23.6 million in payments it received as it acquired collateral for the mortgage-backed securities. The agency said the money should have gone into the securities for the benefit of investors.

UBS agreed to pay a $5.7 million penalty. In addition, it agreed to return the $23.6 million and a $10.8 million fee it received and disclosed for putting together the 2007 transaction. It will also pay $9.7 million in interest. UBS neither admitted nor denied wrongdoing.

The UBS investment involved pooled securities known as collateralised debt obligations (CDOs), which Wall Street banks sold at the height of the housing boom. CDOs combine slices of debt that have varying levels of risk. Full story...

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