Switzerland-based multinational investment bank and financial services company UBS agreed Monday to pay $1.435 billion for fraud in the sale of residential mortgage-backed securities (RMBS).
The penalty, which includes several of UBS’ affiliates based in the US, is based on RMBS issued in 2006 and 2007 that led to the 2008 financial crisis, and settles a civil action filed in November 2018 “alleging misconduct,” the US Justice Department said.
“In the wake of the 2008 financial crisis, people all across the country experienced financial ruin and emotional devastation, and many are still recovering nearly 15 years later,” said Associate Attorney General Vanita Gupta.?
The settlement brings the total amount of civil penalties paid by banks, originators, and rating agencies for such securities to over $36 billion, according to the Justice Department.?
The 2008 financial crisis stemmed from the US housing bubble that was built on sub-prime mortgages and later created derivatives, such as toxic collateralized debt obligations, which overvalued junk assets. The crisis then spread worldwide and became a global catastrophe.
Source: Anadolu Agency