UBS to pay $120 million to settle Lehman claims

The brokerage giant was accused of violating federal securities laws in underwriting and selling Lehman securities to investors, who claimed that offering materials contained misleading information about Lehman's financial condition.
SEP 10, 2013
UBS AG agreed to pay $120 million to settle claims by investors in Lehman Brothers Holdings Inc. securities in a lawsuit tied to the investment bank's 2008 collapse. UBS was accused of violating federal securities laws in underwriting and selling the securities to investors, who claimed that offering materials contained misleading information about Lehman Brothers' financial condition. “UBS is pleased to have resolved this legacy litigation matter arising out of the 2008 financial crisis,” the Zurich- based lender said in a statement. “UBS agreed to the settlement to avoid the cost and uncertainty of continued litigation.” The settlement, disclosed yesterday in a filing in federal court in New York, compares “favorably” with other recoveries stemming from the credit crisis, the plaintiffs said. Lehman Brothers filed for bankruptcy in September 2008. The settlement, which requires court approval, represents a recovery of 13.4 percent of the total face value of securities at issue, or about $896 million, without taking into account UBS's defenses and rights of offset, according to the court filing. Bloomberg News

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