UBS agreed yesterday to pay $50 million to settle federal accusations that it misled investors about a complex mortgage security, a transaction that loomed over the government’s recent legal battle with a former Goldman Sachs trader blamed for his role in creating a similar security, the New York Times DealBook blog reported today. The Securities and Exchange Commission’s case against UBS, the giant Swiss bank, made a cameo appearance in the trial of the former Goldman trader, Fabrice P. Tourre, whom a jury found liable on six counts of civil securities fraud last week. ACA Management, a company that helped structure the mortgage securities in 2007 for both Goldman and UBS, linked the two financial crisis-era cases. In Tourre’s case, the former trader was blamed for not warning ACA that a hedge fund involved in picking assets for the deal was also betting that it would fail. Two former top ACA executives testified on the SEC’s behalf, contending that Tourre kept them in the dark about the hedge fund’s conflict of interest.
