Court Says UBS Must Face Mortgage Lawsuit
The federal regulator of Fannie Mae and Freddie Mac has brought a lawsuit against UBS over the sale of $6.4 billion in securities backed mortgages between September 2005 and August 2007. The lawsuit claims that the bank misled Fannie Mae and Freddie Mac about the quality of the underlying mortgages related to almost $200 billion in mortgage investments. Today, the appeals court rejected arguments by UBS on the grounds that they were filed too late and that the bank lacked standing to pursue the case since its acting directors were not properly appointed.
This rejection by the courts come as many banks are separately seeking to reverse a ruling by U.S District Judge Denise Cote, that limits their ability to collect additional evidence to bolster their defense in the lawsuits. UBS is currently trading at $15.26 a share, a large drop from the $36 it was valued at prior to the recession.
The Wall Street Journal