Swiss banking giant UBS has agreed to pay a combined sum of $1.4 billion in civil penalties in connection with allegations of fraud and misconduct stemming from its offering of residential mortgage-backed securities during the period of the global financial crisis.

This resolution was announced by federal prosecutors on Monday, CNBC reported.

In its own official statement on Monday, UBS characterized the settlement as addressing a “legacy matter” that spans from 2006 to 2007, a timeframe leading up to the eruption of the financial crisis.

This settlement marks the conclusion of the last outstanding case brought by the U.S. Department of Justice against a group of major financial institutions regarding deceptive statements made to buyers of the aforementioned mortgage-backed securities.

The total recoveries resulting from these cases now stand at an aggregate amount of $36 billion, according to statements from the Justice Department.

Interestingly, UBS’ settlement amount closely mirrors the total worth of the residential mortgages it originated between the years 2005 and 2007, a period during which it ceased the issuance of residential mortgage-backed securities.

As per a 2018 statement by the bank challenging allegations from the Justice Department, UBS had originated residential mortgages valued at $1.5 billion within those three years.

Written by staff