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UBS (NYSE:UBS) has reached a deal with the U.S. Department of Justice to pay a $1.435B settlement to resolve all civil claims by the DOJ in connection with the Swiss bank’s legacy residential mortgage-backed securities business in the U.S.
This settlement resolves the last case brought on by a DOJ working group related to banks creating and issuing RMBS leading up to the 2008 financial crisis.
“The settlement has been fully provisioned in prior periods,” UBS said in a statement.
According to the civil action complaint, UBS (UBS) allegedly defrauded investors in connection with the sale of 40 RMBS issued in 2006 and 2007.
It claimed UBS (UBS) knowingly made false and misleading statements about the RMBS’ quality to buyers. Ultimately, the 40 RMBS sustained substantial losses.
“This settlement represents accountability from those who thought they were above the law,” said U.S. Attorney Ryan Buchanan for the Northern District of Georgia. “UBS’ (UBS) conduct in this case played a significant role in causing a financial crisis that harmed millions of Americans.”
The DOJ has collected more than $36B in civil penalties from companies for their alleged conduct related to RMBS sales leading up to the financial crisis, including the UBS (UBS) settlement.
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