UBS has been sued by the US National Credit Union Administration over allegations that the Swiss bank misled two credit unions, which later failed, in their purchase of $1.1 billion worth of mortgage bonds.
The NCUA accused UBS of violating federal and state securities laws by misrepresenting the quality of the loans underlying the mortgage-backed securities that were sold to US Central Federal Credit Union and Western Corporate Federal Credit Union, two large lenders that were subsequently taken over by the regulator.
The lawsuit adds to the Swiss bank’s legal woes, which already include numerous government inquiries related to mortgage- linked investments as well as investigations linked to the alleged manipulation of international lending gauges known as interbank offered rates.
The credit union regulator has been among the most aggressive of US regulators in seeking damages from large banks related to soured mortgage bonds.
It has sued JPMorgan Chase, Royal Bank of Scotland, Goldman Sachs, Citigroup, Deutsche Bank, HSBC and Wells Fargo. It has secured more than $170 million through settlements with Citi, Deutsche and HSBC. – (Copyright the Financial Times Limited 2012)
