UBS Group AG, Switzerland’s largest bank, says it will “vigorously” contest a United States Department of Justice lawsuit concerning mortgage-backed securities it sold in the run-up to the 2008 global financial crisis.
In a statement issued on Wednesdayexternal link, UBS said it had been advised that the DOJ intends to file a civil complaint as early as Thursday “related to UBS's issuance, underwriting and sale of residential mortgage-backed securities (RMBS) more than a decade ago”.
UBS said the DOJ is likely to seek “unspecified monetary civil penalties” dating back to 2006 and 2007.
The Swiss bank said, “The DOJ’s claims are not supported by the facts or the law. UBS will contest any such complaint vigorously in the interest of its shareholders. UBS is confident in its legal position and has been fully prepared for some time to defend itself in court.”
Numerous banks have already paid out billions of dollars in penalties following civil cases brought by the DOJ under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA).
After the financial crisis, banks were accused of misleading investors concerning loans underlying the mortgage-backed securities they sold, with loans made to borrowers who were unable to repay them and based on inflated home evaluations.