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UBS Group AG (UBS) to Pay $230M for MBS Suit Settlement
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UBS Group AG (UBS - Free Report) , headquartered at Zurich, Switzerland, has agreed for a $230-million (£163.2 million) settlement announced by the New York Attorney General Eric Schneiderman, Reuters reported. The bank had been charged for misguiding investors in subprime mortgage-backed securities (MBS) during the financial crisis.
A spokesperson for UBS said, “We are pleased to have resolved this legacy RMBS matter from 2006 — 2007, for which UBS is fully provisioned. It was achieved with the best interests of shareholders in mind.”
The Swiss Bank admitted to its wrongdoings in 2006 and 2007, which led to the crash in housing values in 2008. The bank misguided investors into believing that the residential mortgage-backed securities worth $10 billion, it sold, were in proper compilation with the underwriting guidelines and bundled with applicable rules and regulations.
UBS Group AG is required to pay $41 million in cash, while the remaining will be provided as consumer relief to people impacted by the 2008 mishap.
Schneiderman said in a statement that earlier settlements have funded "critical housing programs" and UBS' settlement "means even more community revitalization work in the years to come."
UBS Group AG comes seventh in the line to settle the New York regulator’s investigations into sales of residential mortgage-backed securities, pushing the recoveries to $3.93 billion. Earlier this month, The Royal Bank of Scotland plc (RBS) agreed upon a similar settlement with the state of New York, worth nearly $500 million.
Further, JPMorgan (JPM - Free Report) , Bank of America (BAC - Free Report) , Citigroup (C - Free Report) , Morgan Stanley and Goldman Sachs Group (GS) have all settled similar claims. Among all, JPMorgan remains the highest penalty payer of about $1 billion.
In Conclusion
Post the 2008 financial crisis, regulators have ramped up their efforts to penalize financial entities for wrongdoings and misrepresentation of facts while selling investment products. Numerous banks have settled mortgage-related litigations. We believe all these settlements indicate banks’ efforts to get past the legal headwinds and concentrate on improving operational efficiency.
In six months’ time, the company’s share price has been up more than 7% on the NYSE as compared with 3% growth recorded by the industry.
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Image: Bigstock
UBS Group AG (UBS) to Pay $230M for MBS Suit Settlement
UBS Group AG (UBS - Free Report) , headquartered at Zurich, Switzerland, has agreed for a $230-million (£163.2 million) settlement announced by the New York Attorney General Eric Schneiderman, Reuters reported. The bank had been charged for misguiding investors in subprime mortgage-backed securities (MBS) during the financial crisis.
A spokesperson for UBS said, “We are pleased to have resolved this legacy RMBS matter from 2006 — 2007, for which UBS is fully provisioned. It was achieved with the best interests of shareholders in mind.”
The Swiss Bank admitted to its wrongdoings in 2006 and 2007, which led to the crash in housing values in 2008. The bank misguided investors into believing that the residential mortgage-backed securities worth $10 billion, it sold, were in proper compilation with the underwriting guidelines and bundled with applicable rules and regulations.
UBS Group AG is required to pay $41 million in cash, while the remaining will be provided as consumer relief to people impacted by the 2008 mishap.
Schneiderman said in a statement that earlier settlements have funded "critical housing programs" and UBS' settlement "means even more community revitalization work in the years to come."
UBS Group AG comes seventh in the line to settle the New York regulator’s investigations into sales of residential mortgage-backed securities, pushing the recoveries to $3.93 billion. Earlier this month, The Royal Bank of Scotland plc (RBS) agreed upon a similar settlement with the state of New York, worth nearly $500 million.
Further, JPMorgan (JPM - Free Report) , Bank of America (BAC - Free Report) , Citigroup (C - Free Report) , Morgan Stanley and Goldman Sachs Group (GS) have all settled similar claims. Among all, JPMorgan remains the highest penalty payer of about $1 billion.
In Conclusion
Post the 2008 financial crisis, regulators have ramped up their efforts to penalize financial entities for wrongdoings and misrepresentation of facts while selling investment products. Numerous banks have settled mortgage-related litigations. We believe all these settlements indicate banks’ efforts to get past the legal headwinds and concentrate on improving operational efficiency.
In six months’ time, the company’s share price has been up more than 7% on the NYSE as compared with 3% growth recorded by the industry.
UBS Group AG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Can Hackers Put Money INTO Your Portfolio?
Earlier this month, credit bureau Equifax announced a massive data breach affecting 2 out of every 3 Americans. The cybersecurity industry is expanding quickly in response to this and similar events. But some stocks are better investments than others.
Zacks has just released Cybersecurity! An Investor’s Guide to help Zacks.com readers make the most of the $170 billion per year investment opportunity created by hackers and other threats. It reveals 4 stocks worth looking into right away.
Download the new report now>>