UBS Said to Settle CDO Case for Less Than $60 Million With SEC

UBS AG (UBSN), Switzerland’s largest bank, is poised to settle U.S. regulatory claims that it misled investors in a 2007 mortgage-bond deal that soured as housing prices collapsed, a person familiar with the matter said.

The bank will pay less than $60 million in a deal with the Securities and Exchange Commission, said the person, who asked not to be named because the matter isn’t public. None of UBS’s executives will be targeted, the person said.

Zurich-based UBS is seeking to wrap up legal claims left over from the U.S. housing slump. The bank posted preliminary earnings last week that beat analysts’ estimates, even as it booked charges tied to an $885 million settlement with the U.S. Federal Housing Finance Agency. That case focused on claims that the lender improperly sold mortgage-backed securities to U.S.- backed financiers Fannie Mae (FNMA) and Freddie Mac (FMCC) during the housing bubble.

The case follows a string of cases involving collateralized debt obligations beginning with the SEC’s lawsuit against Goldman Sachs Group Inc. (GS) in 2010. Fabrice Tourre, a Goldman Sachs executive who worked on the deal known as Abacus, is awaiting a jury verdict over the SEC’s fraud claims against him.

Florence Harmon, an SEC spokeswoman, and Karina Byrne, a spokeswoman for UBS in New York, declined to comment.

The settlement was reported earlier today by the Wall Street Journal.

To contact the reporter on this story: Joshua Gallu in Washington at

To contact the editor responsible for this story: Maura Reynolds at

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