| NEW YORK
NEW YORK Oct 1 UBS AG on Monday lost
a bid to suspend a federal regulator's lawsuit accusing it of
misleading Fannie Mae and Freddie Mac into
buying billions of dollars of risky mortgage debt.
A U.S. appeals court, in a one-sentence ruling, denied the
request by UBS to stay proceedings in federal court in Manhattan
while it appealed a judge's order that the Federal Housing
Finance Agency may pursue claims against the Swiss bank.
On May 4, U.S. District Judge Denise Cote ruled that the
FHFA could continue its case accusing UBS of breaking federal
securities laws by misleading Fannie Mae and Freddie Mac into
buying $6.4 billion of subprime and other residential
A spokeswoman for UBS had no immediate comment on the order
by the 2nd U.S. Circuit Court of Appeals.
The case is one of 17 that the FHFA filed last year against
banks over losses suffered by the housing finance giants on
approximately $200 billion of mortgage debt. Losses on the
securities were a major factor in the 2008 financial crises.
Judge Cote's rejection in May of UBS's motion to dismiss the
case was the first in the litigation, and her reasoning may be
applied to other defendants.
Bank of America Corp, Barclays Plc,
Citigroup Inc, Goldman Sachs Group Inc, JPMorgan
Chase & Co and Royal Bank of Scotland Group Plc
are among the defendants.
The cases are Federal Housing Finance Agency v. UBS Americas
Inc et al, U.S. District Court, Southern District of New York,
No. 11-05201 and FHFA v UBS in the 2nd U.S. Circuit Court of
Appeals, No. 12-3207