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Sat May 5, 2012, 12:09 AM

UBS loses bid to dismiss FHFA mortgage debt case

Source: Reuters

A U.S. judge has rejected UBS AG's bid to dismiss a federal regulator's lawsuit accusing it of misleading Fannie Mae and Freddie Mac into buying billions of dollars of risky mortgage debt.

U.S. District Judge Denise Cote in Manhattan said on Friday that the Federal Housing Finance Agency may pursue claims that UBS violated federal securities laws by misleading Fannie Mae and Freddie Mac into buying $6.4 billion of subprime and other residential mortgage-backed securities.

The case is one of 17 that the FHFA filed last year against banks over losses suffered by the housing finance giants on approximately $200 billion of mortgage debt. Cote's decision is the first to consider a defendant bank's motion to dismiss, and the judge's reasoning may also be applied in the other cases.

"The court is essentially saying that banks do not get to plead ignorance when they had an obligation to provide information to investors," said Kathleen Engel, a professor at Suffolk University Law School in Boston and co-author of "The Subprime Virus."

Read more: http://www.reuters.com/article/2012/05/04/us-usa-fhfa-ubs-idUSBRE8431G720120504



Cote=Clinton nominee (served since 1994)

6 replies, 1937 views

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Reply UBS loses bid to dismiss FHFA mortgage debt case (Original post)
alp227 May 2012 OP
SunSeeker May 2012 #1
Left Coast2020 May 2012 #2
Festivito May 2012 #3
IndyJones May 2012 #4
crazylikafox May 2012 #5
freshstart May 2012 #6

Response to alp227 (Original post)

Sat May 5, 2012, 01:14 AM

1. Wow. Suck it, UBS!

If they didn't get this dismissed at the pleading stage, they're hosed. And wait till everyone else piles on now that the cause of action has been proven to withstand a motion to dismiss. UBS is Swiss, ain't it? Romney might want to move his money (again). Hee hee.

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Response to alp227 (Original post)

Sat May 5, 2012, 01:28 AM

2. Sue them for billions and give it to the people

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Response to alp227 (Original post)

Sat May 5, 2012, 04:44 AM

3. Another story of Republicans taking taxpayer dollars.

That's how W made his money along with the rest the family.

FM&FM had Bush appointees. Sounds like they might have covered their butts a bit in this case and let UBS extend themselves. I'd like to see them all go down, but I'll take what I can get.

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Response to alp227 (Original post)

Sat May 5, 2012, 04:47 AM

4. And when will the rating agencies and insurers be called on the carpet, too?

They both audit the files in the deals before they give their ratings or insurance services. Why are the ratings agencies off the hook?

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Response to IndyJones (Reply #4)

Sat May 5, 2012, 11:03 AM

5. Good question. Friends in high places, no doubt. n/t

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Response to crazylikafox (Reply #5)

Sun May 6, 2012, 12:35 AM

6. Bingo

Standard and Poor is owned by McGraw Hill. The Bush family and the McGraw family go way back.
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=720774&mesg_id=720911

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