UBS Skirts Fraud Suit Over $331M In MBS Losses

Law360, Los Angeles (April 9, 2013, 8:10 PM EDT) -- A New York state judge on Friday dismissed an investor's fraud lawsuit blaming UBS AG for losing $331 million in subprime mortgage-backed securities, ruling that the complaint failed to state a claim and did not specify how UBS deliberately lost the money.

Judge Shirley Werner Kornreich said Loreley Financing had credibility in its argument that the financial services company didn't intend to honor its collateralized debt obligations, which UBS allegedly secretly let hedge fund nonparty Magnetar Capital LLC manage. But such a claim would have amounted...
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