UBS to pay US authorities $1.44 billion in mortgage case – Kommersant

UBS announced, which reached an agreement with the US Department of Justice to settle all civil lawsuits related to the issuance, underwriting and sale of home mortgage-backed securities in 2006-2007. The bank will pay $1.44 billion to the authorities, which will not affect the current activities of the company, since these funds have long been included in the budget as possible losses in litigation.

The case against UBS was opened by the US Department of Justice in 2018. It concerns the activities of the bank on the eve of the global financial crisis. The authorities considered that the Swiss bank was aware of the unreliability of high-risk mortgage loans, but “knowingly and repeatedly” made false and fraudulent statements to investors about the loans it provided in order to obtain benefits.

This behavior by UBS and other banks eventually led to the global financial crisis in 2008. UBS itself then, as a result, was forced to write off mortgage assets worth tens of billions of dollars and cut thousands of employees.

According to the Department of Justice, the US authorities managed to obtain compensation payments from 19 banks and financial institutions totaling more than $36 billion as part of the proceedings around the trade in high-risk housing-backed securities. The largest fine in 2014 was paid by Bank of America – $16.65 billion.

Kirill Sarkhanyants