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By Mike Caggeso
William Wesney, an upset UBS AG (UBS) shareholder, is suing the Swiss banking giant and its officers, arguing that investors were misled about write-downs related to the faltering U.S. subprime mortgage market.
And he may not be alone. Reuters reported that Wesney is seeking class-action status on the suit, which was filed on behalf of shareholders whom bought stock from Mar. 13 to Dec. 11.
Wesney filed the suit Thursday, just two days after the bank announced a $10 billion write-down. The same day, UBS also announced a combined $11.5 billion investment from Singapore's state-run Government of Singapore Investment Corp. Pte. Ltd. (GIC) and an undisclosed investor in the Middle East.
The shareholder suit claims that UBS and certain officers issued statements that "were materially false and misleading because they failed to disclose the company's failure to [take a] timely write-down [of] impaired securities containing subprime debt,".
Europe-based UBS has now become the continent's single-biggest victim of the U.S.-led subprime mortgage crisis: The $10 billion write-down announced Thursday follows a previous $3.8 billion write-down announced in October. The bank said that further write-downs were unlikely, but also didn't rule out the possibility.
News and Related Story Links:
- Coughlin Stoia Geller Rudman & Robbins LLP:
- Money Morning:
Bad Day in Banking: UBS Offsets $10 Billion in Write-Downs With Sale of $11.5 Billion in Shares to Singapore