UBS ferociously fights DoJ fraud claims
UBS, the Swiss bank, is determined to stand its ground regarding a pending lawsuit by the US justice department over the mis-selling of complex financial products that contributed to the 2008 financial crash.
The Department of Justice (DoJ) case filing will focus on the sale of residential mortgage-backed securities (RMBS) in 2006 and 2007, although there are no details about the amount of money involved.
Only recently, UBS settled with the state of New York for $230 million, after an examination of the bank’s packaging and sale of the financial products.
UBS says the DoJ’s claims “are not supported by the facts or the law”.
It adds that “UBS will contest any such complaint vigorously in the interest of its shareholders. UBS is confident in its legal position and has been fully prepared for some time to defend itself in court.”
The bank considers itself a victim, since it also suffered losses on investments in mortgage-related assets when the US housing market crashed. It is believed that UBS invested $100 billion in US RMBS-related assets and lost over $45 billion when the housing market collapsed.
This year, Danske Bank received requests for information from the DoJ in connection with a criminal investigation relating to the €200 billion money laundering case in Estonia.
The DoJ is also probing whether employees in Wells Fargo’s wholesale banking unit committed fraud.
