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UBS Group (UBS) Files Lawsuit Against Bank of America (BAC)
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UBS Group AG (UBS - Free Report) sued Bank of America (BAC - Free Report) yesterday for $200 million. The lawsuit, filed in a New York state court in Manhattan, alleged that the latter refused to cover the legal costs associated with risky mortgages issued before the 2008 financial crisis, per the Reuters report.
The Swiss bank packaged mortgages from Countrywide Financial, which was acquired by Bank of America in 2008, into securities. The bank stated that Countrywide agreed to indemnify it against any claims that the mortgages were improperly or fraudulently underwritten.
In 2013, UBS Group settled issues related to Countrywide loans by paying $885 million to the U.S. Federal Housing Finance Agency. Further, in 2016, the company reached a confidential settlement with the Federal Home Loan Bank of San Francisco regarding the same loans.
UBS stated that despite extended communications with Bank of America regarding indemnification, which includes roughly $53 million of legal costs, BAC refused to comply with its indemnification obligations.
Countrywide became the largest U.S. mortgage lender by offering subprime loans, thus contributing to a housing bubble burst and fuelling the 2008 financial crisis.
BAC acquired Countrywide in 2008. In time, the bank incurred tens of billions of dollars in legal and other expenses associated with the acquisition of Countrywide.
In the past year, BAC’s shares have gained 31.3%, while UBS Group shares have gained 39.9%.
Earlier this week, Ameriprise Financial Services, Inc. (AMP - Free Report) filed a lawsuit against LPL Financial LLC (“LPL”), a division of LPL Financial (LPLA - Free Report) , in the United States District Court. The lawsuit accuses LPL of malpractice and mishandling of private and confidential client data and recruiting advisors while violating legal, regulatory and industry obligations.
The lawsuit, in particular, claims that LPLA deliberately directs the advisors it recruits from Ameriprise and other competitors to take confidential information with themselves on the way out of their former organizations. These actions are deemed to be in direct violation of several security laws and regulations and the standards, which LPL is obliged to comply with as a member of the broker protocol for recruiting.
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UBS Group (UBS) Files Lawsuit Against Bank of America (BAC)
UBS Group AG (UBS - Free Report) sued Bank of America (BAC - Free Report) yesterday for $200 million. The lawsuit, filed in a New York state court in Manhattan, alleged that the latter refused to cover the legal costs associated with risky mortgages issued before the 2008 financial crisis, per the Reuters report.
The Swiss bank packaged mortgages from Countrywide Financial, which was acquired by Bank of America in 2008, into securities. The bank stated that Countrywide agreed to indemnify it against any claims that the mortgages were improperly or fraudulently underwritten.
In 2013, UBS Group settled issues related to Countrywide loans by paying $885 million to the U.S. Federal Housing Finance Agency. Further, in 2016, the company reached a confidential settlement with the Federal Home Loan Bank of San Francisco regarding the same loans.
UBS stated that despite extended communications with Bank of America regarding indemnification, which includes roughly $53 million of legal costs, BAC refused to comply with its indemnification obligations.
Countrywide became the largest U.S. mortgage lender by offering subprime loans, thus contributing to a housing bubble burst and fuelling the 2008 financial crisis.
BAC acquired Countrywide in 2008. In time, the bank incurred tens of billions of dollars in legal and other expenses associated with the acquisition of Countrywide.
In the past year, BAC’s shares have gained 31.3%, while UBS Group shares have gained 39.9%.
Currently, BAC and UBS carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Legal Issues Faced by Other Finance Companies
Earlier this week, Ameriprise Financial Services, Inc. (AMP - Free Report) filed a lawsuit against LPL Financial LLC (“LPL”), a division of LPL Financial (LPLA - Free Report) , in the United States District Court. The lawsuit accuses LPL of malpractice and mishandling of private and confidential client data and recruiting advisors while violating legal, regulatory and industry obligations.
The lawsuit, in particular, claims that LPLA deliberately directs the advisors it recruits from Ameriprise and other competitors to take confidential information with themselves on the way out of their former organizations. These actions are deemed to be in direct violation of several security laws and regulations and the standards, which LPL is obliged to comply with as a member of the broker protocol for recruiting.