UBS SUED BY HSH NORDBANK ON SUBPRIME MORTGAGE SECURITIES
NEW YORK - Swiss investment bank UBS is facing a lawsuit from German bank HSH Nordbank, the largest global provider of shipping finance, over the mis-selling of subprime mortgage securities. The German bank has stated that it intends to sue UBS in New York courts to recoup losses to its $500 million (£254 million) investment fund. The Swiss bank is still recovering from the biggest quarterly loss in banking history and seeing writedowns reach $18.1 billion (£9.2 billion). UBS is also currently considering emergency funding measures from GIC, a Singapore sovereign wealth fund, and an unnamed Middle Eastern investor.
News of the lawsuit has stoked media speculation that there could be a knock-on effect, with more lawsuits filed by angry investors and institutions against the large investment banks that securitised debts from the US subprime mortgage market but have since suffered enormous writedowns on those flawed investments. HSH says it invested $500 million in excess regulatory capital in the fund in question expecting secure returns. It accuses UBS of breaking contractual terms by making high-risk investments and taking out some investments solely for UBS' own benefit.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Basel III endgame: overall relief hides winners and losers
G-Sibs gain from surcharge reform while AOCI hits regional banks
One thing missing from US Basel III proposal: a deadline
Without a deadline, risk teams will struggle to secure resources to begin implementation projects
In simplifying credit risk models, EBA could compound capital costs
Skipping hard yards of internal ratings-based approach might trip higher capital charges and implementation costs
Change fatigue could dim EBA’s credit risk simplicity drive
Revisions may be kept to a minimum as short-term implementation burden weighs on banks
Foreign banks can swerve US Basel op risk capital charges
New proposal offers category III and IV banks op-out from regime, but intragroup trades penalised
BoE’s Bailey expects global consensus on FRTB internal models
Isda AGM: UK is reviewing proposals from US and EU regulators before finalising its IMA rules
DRW chief slams ‘ridiculous’ OCC stablecoin rule
Isda AGM: Wilson warns week-long redemption freeze would deter use of Genius Act coins as cash leg of tokenised repo
Dealers push for more revisions to Basel III endgame
Isda AGM: Goldman, JP Morgan bankers want changes on cross-product netting, CVA and default risk charges
