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International Investor Losses - Investor Insight - Subprime Losses
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Home > Blog > Archive for the “International Investor Losses” Category

Archive for the “International Investor Losses” Category

Watch UBS pay, and pay, for subprime mistakes

HSH Nordbank will sue UBS to recover “significant” losses it suffered when UBS mis-sold – read “mismarked” – and mismanaged subprime securities, BBC News tells us.Â

HSH is one of Germany’s largest banking institutions, and will bring the suit in New York. We’ve said that UBS can expect a slew of such lawsuits, following news of a U.S. criminal investigation, as well as SEC probes over UBS-AG’s questionable valuation and pricing of subprime investments.

UBS customers should move now to learn whether they have been damaged by UBS mis-dealings.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage related investment losses.Â

Overall Subprime losses increasing

So how much has really been lost in the securities market backed up by subprime mortgages? In a January 29th, 2008 Reuters article, analysts at Dresdner Kleinworth estimate these losses at $310 billion.Utilizing the ABX Index, which reflects prices of subprime mortgages originated in 2006 and 2007, Dresdner suggests market losses of just under 30% of all subrimes issued in those 2 years.By increasing its total estimate to $310 billion in losses, Dresdner is increasing its earlier estimate of $130 billion by another $180 billion. One has to wonder how many more revisions we’ll see to this number in the next few years. The second shoe is yet to drop in this financuial tragedy. Â

UBS: “Oops. We Mismarked That Mortgage Bond. It’s Actually…Well, It’s Worthless.”

On February 2, 2008, Kara Scannell, Anita Raghavan and Amirefrati reported in The Wall Street Journal reported on Groundhog Day that UBS AG is under federal criminal investigation for misleading investors about the value of its mortgage bonds. When it’s all over, UBS may want to crawl into a hole. At issue:

• Whether UBS AG criminally misled investors by posting inflated prices of its mortgage bonds, despite knowing that their valuations had dropped significantly.

• Whether UBS violated SEC rules by similarly “mismarking” massive holdings of mortgage securities.

If charges are filed, and they stick, UBS will next face civil action.

At present the bank’s total losses for 2007 are estimated $18.4 billion. UBS is seeking an $11.5 billion bailout from Asian and Middle Eastern investors.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage related investment losses.Â