UBS AG

U.S. Bank and UBS Reach $850M Settlement in RMBS Put-Back Action

and Posted on

 

On July 25, 2018, U.S. Bank NA and UBS AG announced they had reached an $850 million settlement in connection with a dispute over loans in three residential mortgage-backed securities trusts. U.S. Bank filed suit against UBS in the Southern District of New York in 2012 seeking $2 billion for UBS’s alleged breach of representations and warranties about those loans. Following a three-week bench trial in 2016, U.S. District Judge P. Kevin Castel held that UBS had breached representations and warranties in certain respects and appointed special master Barbara S. Jones to review breach allegations concerning thousands of individual loans and issue a recommendation regarding liability and damages as to each loan. Order.

New York Court Permits Aiding and Abetting Claims Against UBS Parent Company to Proceed

Posted on

On April 17, Justice Marcy Friedman of the Supreme Court of the State of New York dismissed most claims in a suit against UBS AG and its subsidiaries arising out of RMBS purchases by plaintiff Deutsche Zentral-Genossenschaftsbank AG (DZ Bank).  Following her prior decisions, Justice Friedman allowed fraud claims to proceed but dismissed plaintiff’s claims for fraudulent concealment, negligent misrepresentation, rescission based on mutual mistake, and punitive damages.  The court allowed claims alleging aiding and abetting by parent companies UBS and UBS Americas Inc. to proceed based on allegations that the defendants shared high-level personnel.  Decision.    

UBS Reaches Settlement with the FHFA

Posted on

On July 25, the FHFA announced that it had settled its claims against UBS AG concerning mortgage-backed securities that UBS sold to Fannie Mae and Freddie Mac between 2004 and 2007.  UBS agreed to pay a total of $885 million.  The settlement covers federal and state securities claims concerning 33 separate RMBS securitizations that FHFA asserted against UBS in four separate lawsuits filed in 2011.  The settlement also provides that the FHFA will not bring putback claims in connection with certain other securities covered by the agreement.  UBS did not admit any liability in connection with the settlement.  Release and Agreement.

Israeli Bank Sues UBS and Goldman Sachs Seeking a Combined $220 Million

Posted on

On January 29, Bank Hapoalim B.M., Israel’s largest bank, filed summonses with notice against UBS AG, Goldman Sachs & Co., and their affiliates, in the Supreme Court for the State of New York.  In both actions, Bank Hapoalim alleges that the offering documents for RMBS it purchased contained material misrepresentations and omissions concerning the underwriting standards for the mortgages underlying the securities, the transfer of mortgage loans, the legal validity of the trusts, and the statistical information about the mortgage loans underlying the securities.  Bank Hapoalim asserts causes of action for common-law fraud, fraudulent inducement, negligent misrepresentation, aiding and abetting fraud, declaratory judgment, and rescission against both UBS and Goldman Sachs, and additional claims for violations of the Securities Act of 1933 against Goldman Sachs.  Bank Hapoalim seeks approximately $116 million in damages from UBS and $106 million in damages from Goldman Sachs, inclusive of punitive damages.  UBS Summons with Notice.  Goldman Sachs Summons with Notice.

UBS Fined £29.7 Million by the FSA for Failure to Prevent Unauthorised Trading

Posted on

 On November 26, the FSA published a final notice to UBS AG, fining it £29.7 million for having breached Principles 2 and 3 of the FSA’s Principles for Business.  The breaches occurred in the Global Synthetic Equities business, conducted from UBS’ London branch during the summer of 2011, and became apparent when UBS discovered that Kweku Adoboli, one of its traders, had lost a total of $2.3 billion through his trading. On November 20, Mr. Adoboli was convicted of two counts of fraud and received a seven year prison sentence.

Irish Financial Firm Sues UBS Alleging RMBS Misrepresentations

Posted on

On September 5, 2012 Sealink Funding Limited filed a summons with notice against UBS AG in the Supreme Court for the State of New York for allegedly misrepresenting the nature of nearly $160 million worth of RMBS securities.  Sealink alleges misrepresentations and omissions regarding underwriting standards, transfers of loans to the trusts, loan-to-value ratios, owner-occupied status, and credit ratings.  The causes of action are for fraud, fraudulent inducement, aiding and abetting fraud, negligent misrepresentation, declaratory judgment, rescission, restitution, and mutual mistake.  Summons with Notice.