UBS To Pay Over $1.4B For Selling Mortgage-Backed Securities
Broker-Dealer Held Accountable For Allegedly Negligent Sales Practices
The US Department of Justice announced that UBS AG consented to pay $1.435B in penalties to settle claims accusing the financial firm of making misrepresentations when it sold residential mortgage-backed securities (RMBS) in 2006 and 2007. This was the last case that a Department of Justice Working Group filed against entities that created and issued RMBS ahead of the 2008 economic crisis. The federal government contends that UBS committed fraud when selling 40 RMBS, including making purportedly misleading statements about the mortgage loans underlying the securities to buyers.
Between 2005 and 2007, UBS originated $1.5M in residential mortgages. The investment bank claims that most of the loans underlying the RMBS in the DOJ’s complaint were originated by other institutions. These securitized mortgage bundles were sold to institutional investors and rated and graded by quality. Unfortunately, buyers were not aware that the ratings given to many of these mortgages inflated their actual quality. UBS and the other banks that settled with the US government purportedly knew that these mortgage-backed securities failed to comply with underwriting standards.
18 domestic and foreign banks have paid $36B in penalties to the DOJ related to their alleged conduct involving RMBS that led to the 2008 financial crisis. Throughout the period that followed, Shepherd Smith Edwards and Kantas (investorlawyers.com) worked hard to represent RMBS investors who suffered losses in these poor-quality investments that were marketed and sold to them by UBS and other broker-dealers. While this latest settlement with the DOJ is further evidence of wrongdoing by a big bank at the time, for residential mortgage-backed securities investors, their best chance for financial recovery was to sue the financial advisors and brokerage firms that allegedly unsuitably marketed and sold these investments.
Nationwide, our broker misconduct lawyers are known for representing institutional investors, wealthy individual investors, and retail investors against Wall Street firms and other US broker-dealers in pursuing the damages they are owed. We represent municipalities, endowment funds, pension funds, charitable organizations, hedge funds, corporations, private equity investors, commercial trusts, retirement plans, high-net-worth investors, and high-net-worth individual investors.
With over a century’s worth of experience in securities law and the securities industry, we have been fighting for investors and protecting their rights during the biggest financial crises for more than 30 years. Most recently, this included representing investors who suffered losses as the COVID-19 pandemic caused the US and global economies to plunge.
Our trusted securities lawyers have the skills, experience, and resources to take on even the most complex investor fraud cases. Over the decades, we have collectively recovered many millions of dollars for thousands of clients.
We also have filed a number of broker-dealer misconduct lawsuits against UBS on behalf of investors whose accounts took huge hits because of financial advisor misconduct and negligence. This included many retirees and small businesses that suffered devastating losses in the 2015 Puerto Rico bond fraud crisis and the wealthy investors that lost millions of dollars because of the UBS Yield Enhancement Strategy (UBS YES).
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