Swiss bank UBS has reached an agreement with the US justice system to pay out $1.45 billion to settle lawsuits linked to the sale of toxic “subprime” financial products, which were at the root of the 2008 financial crisis.
The US Department of Justice said in a statement on Monday that the settlement put an end to the last lawsuits it brought after the crisis.
In total, it has collected more than $36 billion from around 20 banks, rating agencies or lenders.
The Swiss bank said in a separate statement that the sum had already been fully provisioned in its accounts.
The proceedings, launched in November 2018 by the US justice system, related to the design and sale of residential mortgage-backed securities, RMBS.
The complaint alleged that UBS knowingly made false and misleading statements to buyers of these securities relating to the characteristics of the mortgage loans underlying the RMBS.
The defaults by households that took out the loans led, ultimately, to the 2008 crisis.
“This settlement represents an admission of liability by those who thought they were above the law,” noted Georgia state prosecutor Ryan Buchanan.
According to Buchanan, UBS’s behaviour played a significant role in causing the financial crisis that affected millions of Americans.
The complaint by the US authorities accused UBS of knowingly making false and misleading statements to purchasers of these financial products and of committing fraud against investors in connection with the sale of 40 RMBS in 2006 and 2007.
