In the 2017 agreement, Credit Suisse agreed to pay $5.7 billion as settlement fees for hiding the actual value of mortgage-backed securities ahead of the 2008 financial crisis.
Swiss banking giant UBS said on Monday that it has reached an agreement with the U.S. Department of Justice to resolve a legacy matter at Credit Suisse related to the bank’s selling of mortgage-backed securities.
UBS has agreed to pay $300 million as part of the agreement with the DOJ to resolve all of “Credit Suisse’s outstanding Consumer Relief Obligations” under a 2017 settlement, it said. In the third quarter, UBS expects to book a credit in its non-core unit due to the release of the contingent liability established following its emergency takeover of Credit Suisse in 2023.
“With this agreement, UBS has resolved another of Credit Suisse’s legacy issues, in line with its intention to resolve legacy matters at pace in a fair and balanced way and in the best interest of all its stakeholders,” the bank said in a statement.
Retail sentiment on Stocktwits about UBS was in the ‘bullish’ territory at the time of writing.
In the 2017 agreement, Credit Suisse agreed to pay $5.7 billion as settlement fees for hiding the actual value of mortgage-backed securities ahead of the 2008 financial crisis. The DOJ had determined that the lender did not accurately assess the value of the residential loans, which underpinned the securities, leading to significant investor losses.
Earlier this year, UBS agreed to pay $511 million in May to settle charges that the company had helped wealthy Americans evade taxes.
Last month, UBS said its second-quarter profit had doubled to $2.4 billion, and through the Credit Suisse deal, it has achieved $9.1 billion of gross savings.
U.S.-listed shares of UBS have risen 20.8% this year.
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