US sues UBS over alleged crisis-era mortgage securities fraud

The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS Group, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-2009 global financial crisis. While UBS was not a big originator of U.S. residential home loans, U.S. Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell. A UBS spokesma


The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS Group, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-2009 global financial crisis. While UBS was not a big originator of U.S. residential home loans, U.S. Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell. A UBS spokesma
US sues UBS over alleged crisis-era mortgage securities fraud Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-09  Authors: fabrice coffrini, afp, getty images
Keywords: news, cnbc, companies, investors, sues, crisisera, lawsuit, securities, alleged, mortgage, loans, sale, bank, talks, ubs, fraud, residential


US sues UBS over alleged crisis-era mortgage securities fraud

The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS Group, Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-2009 global financial crisis.

UBS was accused of misleading investors about the quality of more than $41 billion of subprime and other risky mortgage loans backing 40 securities offerings in 2006 and 2007, the Department of Justice said in a complaint filed with the federal court in Brooklyn.

The lawsuit came after UBS rejected a government proposal that it pay nearly $2 billion to settle, according to a person familiar with the talks who was not authorized to speak publicly about them.

While UBS was not a big originator of U.S. residential home loans, U.S. Attorney Richard Donoghue in Brooklyn said investors suffered “catastrophic losses” from the bank’s failure to fully disclose the risks of mortgage securities it helped sell.

A UBS spokesman and a Justice Department spokeswoman declined to comment on the settlement talks, but the bank said it will fight the lawsuit.

“The DOJ’s claims are not supported by the facts or the law,” it said in a statement. “UBS is confident in its legal position and has been fully prepared for some time to defend itself in court.”

U.S. officials are seeking unspecified fines against UBS under a federal law allowing it to pursue penalties up to the amounts the bank gained or others lost from alleged misconduct.

The case is one of the last addressing alleged misconduct in the pooling and sale by large banks of mortgage securities that were a major cause of the financial crisis.

Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan Chase, Morgan Stanley and Royal Bank of Scotland previously settled.


Company: cnbc, Activity: cnbc, Date: 2018-11-09  Authors: fabrice coffrini, afp, getty images
Keywords: news, cnbc, companies, investors, sues, crisisera, lawsuit, securities, alleged, mortgage, loans, sale, bank, talks, ubs, fraud, residential


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UBS expects to be sued by US Justice Department over crisis-era mortgage securities

The U.S. Department of Justice did not immediately respond to a request for comment. UBS said it had been advised by the Justice Department that the law enforcement agency intends to file the civil complaint. It anticipates the Justice Department will seek unspecified monetary penalties regarding the mortgage securities, which date back to 2006 and 2007. The lawsuit would be among the last actions over misconduct in the sale and pooling of mortgage securities which helped to cause the financial


The U.S. Department of Justice did not immediately respond to a request for comment. UBS said it had been advised by the Justice Department that the law enforcement agency intends to file the civil complaint. It anticipates the Justice Department will seek unspecified monetary penalties regarding the mortgage securities, which date back to 2006 and 2007. The lawsuit would be among the last actions over misconduct in the sale and pooling of mortgage securities which helped to cause the financial
UBS expects to be sued by US Justice Department over crisis-era mortgage securities Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: fabrice coffrini, afp, getty images
Keywords: news, cnbc, companies, justice, sued, group, expects, sale, sought, bank, ubs, law, mortgage, department, crisisera, settled, securities


UBS expects to be sued by US Justice Department over crisis-era mortgage securities

UBS Group, Switzerland’s largest bank, said it expects to be sued by the U.S. Department of Justice as early as Thursday on civil charges related to the sale of mortgage-backed securities in the run-up to the 2008-2009 financial crisis, according to a company statement.

The bank said the claims were not supported by the facts or the law and it would contest any such complaint “vigorously.”

The U.S. Department of Justice did not immediately respond to a request for comment.

UBS said it had been advised by the Justice Department that the law enforcement agency intends to file the civil complaint.

It anticipates the Justice Department will seek unspecified monetary penalties regarding the mortgage securities, which date back to 2006 and 2007.

The lawsuit would be among the last actions over misconduct in the sale and pooling of mortgage securities which helped to cause the financial crisis.

The Department of Justice has settled similar claims with Citigroup, Deutsche Bank, JPMorgan Chase, Credit Suisse Group, Morgan Stanley, Goldman Sachs, Bank of America and Barclays.

Barclays settled for $2 billion in March after resisting a penalty the U.S. government sought near the end of the Obama administration in 2016. Justice had sought a much higher fine at the time and, when the two sides could not come to terms, the department filed a lawsuit.

More recently, HSBC Holdings agreed to pay $765 million last month to settle with the Justice Department over its sale of defective mortgage securities before the crisis, while major player Royal Bank of Scotland Group reached a $4.9 billion deal in May.


Company: cnbc, Activity: cnbc, Date: 2018-11-08  Authors: fabrice coffrini, afp, getty images
Keywords: news, cnbc, companies, justice, sued, group, expects, sale, sought, bank, ubs, law, mortgage, department, crisisera, settled, securities


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Fed’s Quarles pushes for gradual rate hikes, review of crisis-era bank regulations

Fed Governor Randal Quarles said in a speech Thursday that inflation running a little below target shouldn’t stand in the way of future rate increases. The Fed shoots for a 2 percent inflation rate that it believes represents an equilibrium growth level. Quarles did emphasize that the Fed should be patient and condition future increases on continued progress in inflation and employment. In addition to discussing monetary policy, Quarles mentioned bank regulation as part of a speech commemorating


Fed Governor Randal Quarles said in a speech Thursday that inflation running a little below target shouldn’t stand in the way of future rate increases. The Fed shoots for a 2 percent inflation rate that it believes represents an equilibrium growth level. Quarles did emphasize that the Fed should be patient and condition future increases on continued progress in inflation and employment. In addition to discussing monetary policy, Quarles mentioned bank regulation as part of a speech commemorating
Fed’s Quarles pushes for gradual rate hikes, review of crisis-era bank regulations Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-02-21  Authors: jeff cox, jb reed, bloomberg, getty images
Keywords: news, cnbc, companies, fed, feds, regulation, regulations, quarles, policy, pushes, hikes, gradual, crisisera, bank, increases, market, monetary, target, rate, inflation, review


Fed's Quarles pushes for gradual rate hikes, review of crisis-era bank regulations

Fed Governor Randal Quarles said in a speech Thursday that inflation running a little below target shouldn’t stand in the way of future rate increases.

With the central bank expected to hike at least three times this year, the newest Fed member said he supports a continual gradual pace of increases. The Fed shoots for a 2 percent inflation rate that it believes represents an equilibrium growth level.

The personal consumption expenditures index, which is the Fed’s preferred inflation gauge, ran at 1.7 percent in 2017 including food and energy and 1.5 percent otherwise.

“After assessing the recent data, my take is that the current shortfall in inflation from target as most likely due to transitory factors that will fade through 2018, pushing inflation back up to target,” Quarles said at the 26th International Financial Symposium sponsored by the Institute for International Monetary Affairs.

“Suffice to say, a deviation from our target of a few tenths of 1 percentage point, especially one I expect to fade, does not cause me great concern,” he added.

The event was held in Tokyo, and Quarles spoke in the afternoon Thursday local time.

His comments came at time when the market expects the next rate increase to come at the March meeting of the Federal Open Market Committee. Minutes released Wednesday of the January meeting indicated that officials are optimistic about economic growth and expect that inflation will continue to progress toward the 2 percent target.

Markets have been on edge lately over whether the Fed might decide that the economy is running too hot and in need of more aggressive monetary policy tightening. Traders in the fed funds futures market current have three rate increases pretty well priced in, though there’s a 30 percent chance of a fourth hike, according to the CME’s FedWatch tracking tool.

Quarles did emphasize that the Fed should be patient and condition future increases on continued progress in inflation and employment.

“Against this economic backdrop, with a strong labor market and likely only temporary softness in inflation, I view it as appropriate that monetary policy should continue to be gradually normalized,” he said.

In addition to discussing monetary policy, Quarles mentioned bank regulation as part of a speech commemorating the 10th anniversary of the financial crisis that paralyzed the world economy in 2008.

His comments indicated a desire to review the effectiveness of regulations put in place after the crisis. The Fed, other regulators and Congress clamped down on banks, requiring higher capital levels and less risk-taking.

“At this point, we have completed the bulk of the work of post-crisis regulation,” Quarles said. “As such, now is an eminently natural and expected time to step back and assess those efforts. It is our responsibility to ensure that they are working as intended, and — given the breadth and complexity of this new body of regulation — it is inevitable that we will be able to improve them, especially with the benefit of experience and hindsight.”

Quarles is President Donald Trump’s first successful appointment to the Fed board of governors, which still has four vacancies. Trump also nominated Carnegie Mellon economist Marvin Goodfriend, but he has yet to be confirmed.

WATCH: Market experts weigh in on the Fed’s future.


Company: cnbc, Activity: cnbc, Date: 2018-02-21  Authors: jeff cox, jb reed, bloomberg, getty images
Keywords: news, cnbc, companies, fed, feds, regulation, regulations, quarles, policy, pushes, hikes, gradual, crisisera, bank, increases, market, monetary, target, rate, inflation, review


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