German bank HSH Nordbank announced it will launch a lawsuit against UBS, accusing the Swiss bank of mismanaging funds which were invested in US sub-prime mortgage-related securities.
HSH Nordbank “expects to file its claim against UBS in the State of New York by the end of February,” the bank says in a statement, although it admitted it was still open to talks.
The subject of the lawsuit is a $444 million investment in collateralized debt bonds (CDOs) structured, managed and sold by UBS in 2002, AFP reports.
HSH Nordbank argued that “UBS’ management of the portfolio has been in breach of its contractual obligations and fiduciary duties and that substitutions were made solely for the benefit of UBS.”
The German bank is seeking “the recovery of its losses which we regard as the responsibility of UBS,” it says.
Although the bank did not reveal how much compensation it is looking for, a spokesman for UBS told Marketwatch that it is ready to defend itself vigorously against the lawsuit.
UBS has so far lost over $18 billion due to trading in sub-prime mortgage securities.