UBS sued by US regulator over sale of mortgage-backed securities
New Delhi: A US regulator has sued UBS over the sale of mortgage-backed securities to two credit unions, a news wire reported on Friday.
As per a court filing, the US regulator has accused the Swiss bank of violating federal and state laws through misrepresentations in the sale of mortgage-backed securities to two credit unions that later failed.
The misrepresentations in the offering documents had caused US Central and WesCorp to believe the risk of loss was minimal, when in fact the risk was substantial, NCUA said.
The two unions, US Central Federal Credit Union and Western Corporate Federal Credit Union paid more than USD 1.1 billion for the securities in 2006 and 2007, according to a complaint filed by the regulator, National Credit Union Administration.
With Agency Inputs