Banks shiver as UBS swallows $885 million U.S. fine

[dipsydoodle]

Source: Reuters

(Reuters) - UBS will pay $885 million (574.6 million pounds) in a settlement with a U.S. regulators over allegations the Swiss bank misrepresented mortgage-backed bonds during the housing bubble, paving the way for billions more to be paid by other banks.

The Federal Housing Finance Agency, which oversees government-sponsored housing enterprises Fannie Mae and Freddie Mac, said late on Thursday UBS must pay $415 million to Fannie Mae and $470 million to Freddie Mac to resolve claims related to securities sold to the companies between 2004 and 2007.

Other European banks, including Royal Bank of Scotland and Barclays, and U.S. banks including JP Morgan and Bank of America could face costly settlements. RBS was the worst performing of European banks on Friday, shares falling 2.5 percent by 0930 GMT.

Fannie Mae and Freddie Mac were seized by the U.S. government in 2008 as the housing crisis threatened their solvency. They have received $187 billion in taxpayer funds to stay afloat.

Read more: http://uk.reuters.com/article/2013/07/26/uk-usa-ubs-settlement-idUKBRE96P0DV20130726

[JimboBillyBubbaBob]

1. It's a start!

This cake needs icing however. We need to see some of these people dealt extremely large jail terms.

[OnlinePoker]

3. Not likely you'll see any of the big boys in jail

Yesterday, SAC capital was indicted for insider trading, being called "a veritable magnet of market cheaters". But for some reason, Steven Cohen, the head of the company, was not charged. And yet, the company is still allowed to trade for the time being, which to me is the biggest farce.

http://dealbook.nytimes.com/2013/07/25/sac-capital-is-indicted/?_r=1

[valerief]

2. Isn't that lunch money to them? Just a drop in the bucket. nt

[OnlinePoker]

6. They made $735 million this past quarter AFTER reporting the loss from the fine. n/t

[valerief]

13. Thanks for validating my point! nt

[Helen Borg]

4. Still, a tiny amount...

Compared to what they actually stole.

[tridim]

5. Damn you Obama!!!11

[freshwest]

26. LOL

[ConcernedCanuk]

7. Sounds like a deal to me!

.
.
.

Steal $187 billion

Pay back $1 billion

Gee, I'd never do that again!

Only $186 billion profit



CC

[closeupready]

14. Yep, pretty much. An unofficial 'cost of doing business'.

I honestly believe there are those who subscribe to this.

I mean, if money was all that mattered to you, why on Earth wouldn't you think that way? Further, wouldn't it be actually irresponsible to your investors NOT to think and behave that way?

So, yeah, that is the lesson.

[DallasNE]

19. Oh, Wow

Once again hit the shareholders with a stiff fine while the executives that committed the crime carry on in their capacity and cash their bonus checks.

How about hitting those executives with minimum 20 year prison terms.

[L0oniX]

8. Chump change for banksters. n/t

[tridim]

21. An almost ~billion~ dollar fine is NOT chump change to any business.

Are you fucking kidding me?

[Javaman]

9. that's fine and dandy...;

now can we have criminal trials?

[AllyCat]

10. Just slightly more than chump change to these criminals.

[askeptic]

11. They should lose their US Charter

It's real interesting how the "corporate personhood" thing never seems to apply during punishment. Individuals would be in jail and out of business -- so it should be for corporations -- out of business. In the UBS case we could pull their US charter and they could no longer do business in the US.

[IthinkThereforeIAM]

12. Or turn over Phil Gramm...

... the father of the US foreclosure crisis, who is now a UBS bank officer.

http://www.motherjones.com/politics/2008/05/foreclosure-phil

on edit: typo

[tom_kelly]

16. Right,

I'm sure they're all justa shiverin away right about now. Ugh. Just something to be pointed at as a "look, see" when asked about holding Wall St. accountable.

[mountain grammy]

17. Yeah, I'll bet they're shivering..

about having to pay even a tiny fraction of their ill gotten gains. I'd like to see them shivering in a jail cell.

[AtheistCrusader]

18. Five years later, forced to pay a small pecentage of one year's theft.

Oh boy. Glorious day. Yippee.

[tridim]

22. Did you read the first two words in the headline?

I thought not.

Nothing this administration does is ever good enough for Neo-DU. EVER!!!111

[AtheistCrusader]

23. Of course I read it.

I'm contesting the very idea. Fucking banks shivering over it, please. This fine was negligible.

Doesn't have to be about 'this administration' either. This is an on-going problem over decades, without specific political affiliation.
There is an obvious solution to the problem, but it will NEVER be attempted.

[tridim]

24. A billion dollar fine is massive by any measure.

And there are more fines coming.

What number would make Neo-DU happy? One trillion? A gazillion?

[AtheistCrusader]

25. With a market capitalization of 73.5bn I would say 10-15 billion in fines would send an unambiguous

message. The fine should threaten the viability of the company. Put them in a position of 'do it again and you won't exist anymore'.

Of course, I'd like to see some perp walks with it.

(Edit: Also the fines should be somewhat in line with the damages that humans incurred as a result of the company's actions)

[SwankyXomb]

28. Complete and total liquidation.

And then seize the assets of the banks.

[frylock]

20. these fuckers should be shivering in the corner of a cold, dank cell..

fuck this shit. this isn't even a loss for them.

[ut oh]

27. Obviously not costly

enough...

It really should be the exec's that have to pay since they got astronomical bonuses for wrecking the economy.

Jailtime would be great too (though that's obviously not going to happen).