UBS Group is waiting to be hit with a Department of Justice (DOJ) lawsuit related to its sale of residential mortgage-backed securities (RMBS) in period before the 2008 financial crisis.
The Swiss-based bank issued a statement claiming the DOJ was planning to cite violations of the Financial Institutions Reform, Recovery, and Enforcement Act in a a civil complaint seeking unspecified monetary penalties related to RMBS sales from 2006 and 2007. UBS issued a statement denouncing the DOJ’s actions.
“The DOJ’s claims are not supported by the facts or the law,” said the bank in its statement. “UBS will contest any such complaint vigorously in the interest of its shareholders. UBS is confident in its legal position and has been fully prepared for some time to defend itself in court. UBS was not a significant originator of U.S. residential mortgages and suffered massive losses on its investments in U.S. mortgage-related assets when the U.S. housing market collapsed. This fact alone negates any inference that UBS engaged in an intentional fraud.”
The DOJ did not issue a comment on the UBS statement.