UBS AG has agreed to pay less than $60 million to settle Securities and Exchange Commission allegations that it misled investors in a mortgage-bond deal that soured during the financial crisis, the Wall Street Journal reported today. None of the Swiss bank’s current or former employees will be charged as part of the civil action. The amount would be one of the smallest paid by a Wall Street firm to the SEC to settle allegations involving toxic securities sold leading up the 2008 financial meltdown. The pact will resolve an SEC investigation into a collateralized debt obligation (CDO) that UBS created in 2007. The SEC probe centered on allegations that UBS improperly retained upfront cash it received when it was constructing the CDO.
