U.S. sues UBS, alleges crisis-era mortgage securities fraud
NEW YORK (Reuters) – The U.S. government on Thursday filed a civil fraud lawsuit accusing UBS Group AG (UBSG.S), Switzerland’s largest bank, of defrauding investors in its sale of residential mortgage-backed securities leading up to the 2008-09 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.
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