Sunday, May 06, 2012

UBS Loses Bid to Block Fannie, Freddie Suits

A federal judge Friday denied UBS AG's UBS -0.08%effort to dismiss a lawsuit by the federal regulator for Fannie Mae and Freddie Mac alleging the Swiss bank deceived the mortgage giants into buying billions of dollars of shaky loans during the housing boom.

The Federal Housing Finance Agency filed suits against UBS and 17 other banks last summer alleging that they violated federal securities law in selling nearly $200 billion of mortgage-backed securities. The suits represent one of the most sweeping actions by a federal regulator stemming from the mortgage crisis.

Friday's ruling by U.S. District Judge Denise Cote of Manhattan is the first on any of the defendants' motions to dismiss the FHFA suits. The court is handling pretrial proceedings for 15 of the lawsuits filed by the FHFA

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