U.S. regulator announces $885 million settlement with UBS

WASHINGTON Thu Jul 25, 2013 7:04pm EDT

The logo of Swiss bank UBS is seen on an office building in Zurich July 22, 2013. REUTERS/Arnd Wiegmann

The logo of Swiss bank UBS is seen on an office building in Zurich July 22, 2013.

Credit: Reuters/Arnd Wiegmann

WASHINGTON (Reuters) - A U.S. regulator on Thursday said it reached an $885 million settlement with UBS over allegations the bank misrepresented mortgage-backed bonds that were sold to Fannie Mae and Freddie Mac during the housing bubble.

Under the terms of the agreement with the Federal Housing Finance Agency, UBS must pay about $415 million to Fannie Mae and $470 million to Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007. The Swiss banking giant did not admit to any liability or wrongdoing in settling the allegations. On Monday, it said it had reached an agreement in principle with the FHFA.

Fannie Mae and Freddie Mac were seized by the U.S. government in 2008 as the housing crisis threatened their solvency. They have received $187.5 billion in taxpayer funds to stay afloat.

UBS is just one of 18 banks the FHFA pursued in 2011 for allegedly misrepresenting the quality of the collateral backing securities during the run-up to the financial crisis. The regulator is seeking to recover losses on mortgage bonds sold to Fannie Mae and Freddie Mac, which could result in the recovery of billions of dollars.

Citigroup and General Electric have already settled with the FHFA for undisclosed sums.

(Reporting by Margaret Chadbourn; editing by Jackie Frank and Phil Berlowitz)

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Comments (3)
DeMarco deSade, should be ashamed of itself, funding gov’t operations via backdoor settlement agreements like this… . Still it’s adorable how Uniformly Bankrupting Society believes that if they don’t admit to being a criminal enterprise then they magically ain’t one.
In World War 1 the German soldiers referred to the Scottish soldiers as The Ladies From Hell. So this is what the boys on both sides died for in their millions eh?
That cold wind ye feel are Banshee comin to check yer kilt. There’s a racket alright but no balls.

Jul 25, 2013 6:26pm EDT  --  Report as abuse
Cyberblunt wrote:
Settlements… What happen to going to jail?

Jul 25, 2013 12:45am EDT  --  Report as abuse
tmc wrote:
Banksters are truly above the law.

Jul 26, 2013 2:37am EDT  --  Report as abuse
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