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Bates White experts assist Department of Justice in assessing civil penalties relating to UBS AG’s settlement

UBS AG and several of its US-based affiliates agreed to pay more than $1.4 billion in penalties to settle a civil action alleging misconduct related to UBS’s underwriting and issuance of residential mortgage-backed securities (RMBS) issued in 2006 and 2007. The Department of Justice (DOJ) filed suit alleging that UBS defrauded investors in connection with the sale of 40 RMBS, knowingly making false and misleading statements to buyers of the securities relating to the characteristics of the mortgage loans underlying the RMBS. The suit alleged that in publicly filed offering documents, UBS misrepresented significant numbers of the loans backing the RMBS and failed to comply with loan underwriting guidelines designed to assess borrowers’ ability to repay.

Karl Snow submitted an affirmative expert report on behalf of the DOJ with a team led by Kory Shipp. Marti P. Murray, Chris Bennett, and Dr. Snow were retained to provide rebuttal testimony. The settlement resolves the last case that the DOJ brought as part of a state and federal law enforcement effort that was dedicated to investigating the conduct of banks and other entities in their roles in creating and issuing RMBS leading up to the 2008 financial crisis.

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