Swiss bank UBS to settle mortgage dispute with $1.4 billion penalty

Zurich, Aug. 15, (dpa/GNA) – The major Swiss bank UBS is to pay out nearly $1.5 billion in penalties to end a legal dispute in the US over junk mortgages from 2006 and 2007.

The bank had reached an agreement with the US Department of Justice to settle the matter, related to the issuance and sale of residential mortgage-backed securities, UBS announced on Monday evening.

Residential mortgage-backed securities are debt-based assets backed by the interest paid on residential loans. They were the trigger for the global financial crisis in 2008.

Under the settlement, $1.43 billion would be paid to resolve all civil claims brought by the US Justice Department in connection with the matter. The amount of the settlement has already been fully accrued in prior periods, according to UBS, and will therefore have no impact on earnings.

GNA