UBS AG avoided a trial with an agreement to settle a lawsuit in which it was accused of peddling “crap” securities during the 2007 financial crisis.
A trial was scheduled to start Wednesday on Connecticut hedge fund Pursuit Partners’ claim that UBS sold it asset-backed securities without disclosing they were about to be downgraded.
Attorneys for UBS and the Stamford-based hedge fund announced in open court Tuesday that they had reached an agreement to resolve the lawsuit, said Rhonda Hebert, a spokeswoman for the Connecticut state court system. Jury selection will be postponed while the parties work out the details, Hebert said.
Pursuit Partners sued UBS in 2008, accusing it of selling it $40.5 million of collateralized debt obligations from July 2007 to October 2007, which some of the bank’s employees referred to as “vomit” and “crap” in e-mails.
Terms of the agreement weren’t immediately available and the settlement couldn’t be verified in court records.
Attorneys for UBS and Pursuit Partners didn’t immediately respond to telephone and e-mail messages seeking comment on the settlement. Gregg Rosenberg, a spokesman for UBS, declined to comment.
The settlement was first reported by Business Insider.
The case is Pursuit Partners LLC v. UBS AG, UWY-CV-08-40331-48-S, Connecticut Superior Court (Waterbury).