UBS To Pay $49.8 Million To Settle SEC Fraud Charges Over CDO

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UBS AG agreed to pay $49.8 million to settle U.S. Securities and Exchange Commission charges it misled investors about a mortgage bond transaction it structured prior to the 2008 financial crisis, the regulator said on Tuesday.

UBS To Pay $49.8 Million To Settle SEC Fraud Charges Over CDO

The SEC said the payment resolves a probe into ACA ABS 2007-02, a collateralized debt obligation (CDO) that the Swiss bank created in 2007.

According to the regulator, UBS received $23.6 million in upfront payments while acquiring credit default swaps as collateral for the CDO.

The SEC said that rather than transfer the cash to the CDO, UBS kept the full amount, failed to disclose it to investors, and inaccurately represented to investors its cost of acquiring the collateral.

UBS did not admit wrongdoing in the settlement. No individuals were charged.

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