UBS sued by US regulator over mid-sold securities

UBS is being sued by a US regulator over claims that the Swiss bank mis-sold mortgage-backed securities to two credit unions in the US.

The securities later failed.

UBS is being sued for $1.1bn (£689m) by two credit unions – US Central Federal Credit Union and Western Corporate Federal Credit Union – relating to securities sold between 2006 and 2007.

Corporate, or wholesale, credit unions provide services to retail credit unions including lending, as well as payment clearance services.

Wholesale credit unions in the US experienced more troubles than their retail counterparts because they did not face the same restrictions on permitted investments, leading to big losses during the financial crisis.