UBS AG agreed to pay a heavy fine to settle with U.S. regulators for allegedly misrepresenting mortgage-backed bonds sold during the American housing bubble, potentially resolving a lingering issue stemming from the Swiss lender’s once-aggressive investment bank, the Wall Street Journal reported today. UBS said that it has agreed to a settlement with the Federal Housing Finance Agency, the U.S. regulator for mortgage-finance giants Fannie Mae and Freddie Mac, over allegations that the Swiss banking giant sold defective mortgage-backed securities in the lead-up to the U.S. financial crisis between 2004 and 2007. UBS is just one of a number of banks that have been pursued by the FHFA for allegedly selling defective mortgage-backed securities. In May, Citigroup Inc. also reached a related settlement with the regulator.
