The Department of Justice of the US government has been on a spree of filing lawsuits against agencies that misconducted and sold off mortgage securities in 2006 and 2007, which caused the financial crisis. The latest to get involved in this tangle is the UBS, the largest bank in Switzerland, who has been submitted a notice of a prospective lawsuit that will be filed against them soon.
The Justice Department is expected to file a civil case against UBS, through the law enforcement service, as it has done with a number of other banks. It will be one of the last agencies that will be asked to compensate with respect to the security values of a mortgage.
The UBS has vehemently denied any such charges and intends to contest the case in the court of law as they feel that the Department of Justice has no claim, fact or law backing their allegations and were completely baseless. The Justice Department was not available for comments on these counter allegations yet and it still remains to be seen.
Monetary penalties and compensations in the form of the settlement are the expected way of settling this lawsuit like it has been done with the previous other agencies. Reputed organizations like Goldman Sachs, Deutsche Bank, JP Morgan, Citibank, Barclays have been slapped with similar lawsuits in the past.
Barclays settled for $2 billion around 2016, when President Obama was at the end of his tenure, though the compensation asked for by the Justice Department was much more, but since they could not come to an agreement on the issue, this monetary value was accepted. Similarly, HSBC holding had to settle for as much as $765 million.
The most aggrieved in this matter was the Royal Bank of Scotland Group who had to pay a hefty fine equivalent to $4.9 billion to settle scores, in the month of May.
What remains to be seen is the proceedings that take place between the Justice Department and the UBS and the compensation amount that is agreed upon, in case it comes to that.