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UBS eyes new legal battle in US over subprime crisis

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UBS eyes new legal battle in US over subprime crisis
UBS on insisted on Thursday that it was not a major player in US residential mortgages at the time the housing market crumbled.. Photo: AFP
18:54 CET+01:00
Swiss banking giant UBS said on Thursday that it was bracing for another legal battle in the US over sales of mortgage-backed securities in the run-up to the financial crisis a decade ago.

The bank said in a statement it had been advised that the US Department of Justice "intends to file a civil complaint as early as November 8, 2018."

"UBS anticipates that the complaint will seek unspecified monetary civil penalties" over transactions that date back to 2006 and 2007, it said in a statement.

Read also: France wants UBS fined €1.6 billion for tax fraud - lawyer

The bank insisted on Thursday that the new US authorities' claims against it were "not supported by the facts or the law", and said it would contest any complaint "vigorously".

"UBS is confident in its legal position and has been fully prepared for some time to defend itself in court," it said.

Subprime mortgages -- which are risky but classified as safe investments by credit ratings agencies -- were at the heart of the 2007-2008 financial crisis that devastated communities around the world and brought a number of banking giants to their knees.

US authorities have opened a number of cases against banks they accuse of intentionally converting "toxic" mortgages into seemingly safe financial products in the years leading up to the crisis.

A number of banks have been slapped with heavy penalties, including UBS's compatriot Credit Suisse, which last year settled its case for a whopping $5.28 billion.

UBS insisted on Thursday that it was not a major player in US residential mortgages at the time the housing market crumbled.

"This fact alone negates any inference that UBS engaged in an intentional fraud," it said.

Earlier this year, UBS was among several large banks to settle a case over sales of subprime mortgages with the New York Attorney General, with the Swiss bank agreeing to dish out $230 million in that case.

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