Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Recently, UBS AG (UBS - Analyst Report) – Switzerland’s largest bank by assets – won the lawsuit filed against it by the Pension Trust Fund for Operating Engineers, a U.S.-based pension fund. The plaintiffs had accused the banking major of misrepresentations during the offering of mortgage backed securities (MBS) worth $2.5 billion in 2007.

The class action lawsuit, filed in 2010, was dismissed by The Third Circuit Court of Appeals in Philadelphia. The court declared that the Calif.-based pension fund should have started investigating its $5 million investment in the faulty bonds in 2008 itself. This was the same year in which the pension fund had filed a class action lawsuit in California against UBS AG and other banks over the sale of fraudulent bonds related to Countrywide Financial Corp mortgages.

While Countrywide Financial Corp. originated almost 52% of the mortgage-backed securities and IndyMac Bancorp Inc. originated 40%. Thereafter, IndyMac collapsed in mid-2008, and Bank of America Corporation (BAC - Analyst Report) acquired Countrywide in 2008.

During dismissal of the lawsuit that was filed in 2010, the court stated that  the pension fund had earlier knowledge of the faulty MBS.

Post the financial crisis; many major banks such as Citigroup Inc. (C - Analyst Report) and JPMorgan Chase & Co. (JPM - Analyst Report) have been facing lawsuits over the misrepresentation of exposure to mortgage-backed securities. UBS too has not been spared. However, this dismissal of the above-mentioned suit offers relief as it reduces the litigation overhangs of the company. As neither any penalty nor settlement amount was required for the resolution, the company’s profitability did not suffer as well.

UBS AG currently carries a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BITAUTO HOLD BITA 35.33 +14.82%
ANI PHARMACE ANIP 24.79 +14.66%
E HOUSECHINA EJ 10.99 +9.24%
CANADIAN SOL CSIQ 26.97 +7.15%
INTERNATIONA ICAGY 33.30 +5.38%