By John Letzing | The Wall Street Journal
UBS AG UBSN.VX +0.39% has agreed to a settlement with U.S. regulators on allegations it misrepresented mortgage-backed bonds sold during the housing bubble, potentially resolving an outstanding issue left over from the Swiss lender’s investment bank.
The bank said Monday that the agreement with the Federal Housing Finance Agency, the U.S. regulator for government-controlled mortgage-finance companies Fannie Mae FNMA -4.35% and Freddie Mac, FMCC -1.36% covers allegations it sold defective mortgage-backed securities in the run-up to the financial crisis from 2004 to 2007.
UBS didn’t disclose the size of the settlement, but the Zurich-based company said its second-quarter results would include a pretax charge of about 700 million Swiss francs ($744 million) booked to the bank’s corporate center, which houses legacy investment-banking businesses that helped run UBS off the rails and contributed to it requiring a Swiss government bailout in 2008.
