The banking giant UBS is facing a hefty fine from the US Department of Justice for its role in the Great Financial Crisis of 2008.
The DOJ says UBS has agreed to pay $1.435 billion in penalties to settle allegations that the bank defrauded investors while underwriting and issuing residential mortgage-backed securities (RMBS) in 2006 and 2007.
The DOJ says UBS, which has nearly $4 trillion in assets, knowingly made false and misleading statements to those buying the securities.
The government says it’s also determined that contrary to the bank’s representations, UBS knew that the property values associated with many of the securitized loans were unsupported, but issued them anyway despite doing extensive due diligence. Many of the loans backing UBS’ RMBS did not comply with loan underwriting guidelines, which the bank was aware of, says the DOJ.
Says Associate Attorney General Vanita Gupta,
“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. As this settlement demonstrates, the department and our partner agencies remain committed to holding accountable those who break the law and undermine the well-being of American families.”
UBS joins a slew of other institutions in paying penalties related to the crisis of 2008, including Bank of America, Barclays, Goldman Sachs and JPMorgan.
According to the DOJ, the UBS settlement means that in total, the US government has collected just over $36 billion in penalties in relation to the 2008 crisis. However, some reports estimate that the total household loss due to the event was as high as $19.2 trillion – not adjusting for inflation.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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