UBS to Pay $300M to Settle Credit Suisse Mortgage Securities Lawsuit

Globe and Mail

a day ago

UBS Group AG UBS has agreed to pay $300 million to the United States Department of Justice (DOJ) to resolve a legacy matter related to the mis-selling of mortgage-linked investments by Credit Suisse in the United States.
On Aug. 1, 2025, Credit Suisse Securities (USA) LLC agreed to settle all Credit Suisse's outstanding consumer relief obligations under the 2017 settlement for its residential mortgage-backed securities (RMBS) business.
History of the UBS Lawsuit
In January 2017, Credit Suisse reached a $5.28 billion settlement over its role in selling residential mortgage-backed securities between 2005 and 2007. The agreement required the bank to pay $2.48 billion as a civil penalty to the U.S. government, along with $2.8 billion in relief measures such as loan modifications for struggling homeowners, debt forgiveness and funding for affordable housing initiatives.
The 2017 settlement was part of a broader initiative by the U.S. authorities to hold major banks accountable for their involvement in the 2007–2008 financial crisis. The DOJ raised allegations that Credit Suisse knowingly acquired and securitized low-quality mortgage loans while misleading investors about the associated risks of these securities.
In the years leading up to the crisis, many large banks engaged in misconduct related to RMBS. The DOJ ultimately collected roughly $36 billion in civil penalties from 18 financial institutions for RMBS-related fraud during that period.
UBS resolved its own RMBS case with the DOJ in August 2023, agreeing to pay about $1.44 billion in a civil penalty, roughly four months after it acquired Credit Suisse in a $3.25 billion government-orchestrated deal.
Other Regulatory Probes Faced by UBS
In May 2025, UBS agreed to pay $511 million to resolve a tax probe by the U.S. DOJ against Credit Suisse for preparing false income tax returns and tax evasion.
The two-year investigation by the DOJ, initiated before UBS acquired Credit Suisse, found that Credit Suisse aided and assisted in tax evasion through its 475 offshore accounts to prepare false tax returns to conceal more than $4 billion from the US Internal Revenue Service (IRS). The DOJ reported that most of this misconduct occurred between 2014 and June 2023.
Thus, an increase in claims against the company and regulatory fines over Credit Suisse's dealings is expected to increase litigation provisions in the near term.
Over the past six months, UBS Group shares have gained 11.9% compared with the industry 's 17.6% rise.
UBS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Litigations Faced by Other Finance Firms
Last month, CNBC reported that Robinhood Markets, Inc. HOOD is under investigation by Lithuania's central bank, its lead regulator in the European Union (EU), regarding its newly launched tokenized equity products.
The scrutiny follows Robinhood's recent launch of its Stock Tokens product across the EU, aimed at offering blockchain-based tokenized access to shares, including those of private firms. The offering sparked immediate questions from OpenAI, which openly distanced itself from HOOD's product.
Robinhood defended the tokens by highlighting that they are backed by ownership interests designed to provide investors with indirect exposure to private markets. Nonetheless, regulators remain wary, specifically regarding the transparency and legality of how these digital instruments are offered to retail investors.
In June, in a ruling, Anthony Trenga, U.S. District Judge in Alexandria, VA, announced that Capital One COF will have to face a lawsuit by social media creators who claim that the bank's free browser extension deprived them of commissions on sales generated through their content.
According to the creators, the Capital One Shopping browser extension, which has more than 10 million users, is used to discover discounts. It erroneously reflected Capital One as the source of referral traffic at checkout, making it appear as if consumers had clicked the bank's referral links before making purchases.
The creators alleged that this enabled Capital One to collect millions of dollars in commissions that rightfully belonged to bloggers, influencers, YouTubers and other content creators.
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UBS Group AG (UBS): Free Stock Analysis Report
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