A U.S. regulator has launched a lawsuit against UBS for the improper sales of mortgage-backed securities, says Reuters.
It’s accusing the Swiss bank of violating federal and state laws by omitting crucial information during the sale of the securities to two credit unions.
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The two unions, the U.S. Central Federal Credit Union and Western Corporate Federal Credit Union, paid more than $1.1 billion for the securities in 2006 and 2007, says regulators. Court filings indicate the stocks later failed.
The National Credit Union Administration filed a complaint in Kansas after both unions experienced losses.
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In addition, Swiss prosecutors’ opened a criminal investigation against UBS in August. They’re determining if the bank helped launder money linked to illegal rainforest logging in Malaysia.
Federal Prosecutors’ Office spokeswoman Jeannette Balmer confirmed the probe at the end of August.
The investigation was sparked by a complaint from Swiss environmental group Bruno Manser Foundation, which alleged the chief minister of the Malaysian state of Sabah used UBS bank accounts in Hong Kong to launder over $90 million linked to logging operations in Borneo.
UBS said in a statement, “We apply the highest standards worldwide in the fight against money laundering and corruption”, and said it would co-operate fully with Swiss authorities.
