{"id":1386,"date":"2014-01-29T16:03:49","date_gmt":"2014-01-29T16:03:49","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2014\/01\/a_history_of_ubs_bad_bets"},"modified":"2014-01-29T16:03:49","modified_gmt":"2014-01-29T16:03:49","slug":"a-history-of-ubs-bad-bets","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/a-history-of-ubs-bad-bets\/","title":{"rendered":"A History of UBS Bad Bets"},"content":{"rendered":"

\t\t\t\tThe current quagmire of UBS Puerto Rico offloading billions of dollars in speculative Puerto Rico bonds onto its unsuspecting clients is by no means a new or limited occurrence for UBS. UBS has a history of taking huge gambles and often passing the bad bets onto its clients. <\/p>\n

Between 2002 and 2007, UBS and its U.S. subsidiary UBS Real Estate Securities were issuing and underwriting massive amounts of investments backed by, and based upon, U.S. residential mortgages. In essence, UBS was bundling together groups of private mortgages where U.S. residents were buying or refinancing a home. UBS then turned around and sold those bundles to investors as safe and conservative investments, despite the fact that many of those loans carried tremendous risks and were very likely to default. All told, UBS faced potential liability approaching $45 billion<\/a> in connection with this activity. Aside from the legal liability, UBS was also forced to write off approximately $50 billion<\/a> in bad debt held in its own inventory in these securities. <\/p>\n

In 2011, UBS lost another $2 billion as a result of a trader who was making massive bets trading in derivative securities. Generally speaking, derivatives are investments whose price is based upon the value of other securities. These include things such as futures, options, and swaps. All of these instruments are commonly considered high risk instruments. In this case, the UBS trader was betting on the direction that various exchange traded funds, or “ETFs” would go in the future. Except this trader was placing these bets on a massive scale with huge amounts of leverage, to the point that relatively small changes in the price of the ETFs resulted in massive losses to UBS.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The current quagmire of UBS Puerto Rico offloading billions of dollars in speculative Puerto Rico bonds onto its unsuspecting clients is by no means a new or limited occurrence for UBS. UBS has a history of taking huge gambles and often passing the bad bets onto its clients. Between 2002 and 2007, UBS and its […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1386","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nA History of UBS Bad Bets — Investor Lawyers Blog — January 29, 2014<\/title>\n<meta name=\"description\" content=\"The current quagmire of UBS Puerto Rico offloading billions of dollars in speculative Puerto Rico bonds onto its unsuspecting clients is by no means a new — January 29, 2014\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/a-history-of-ubs-bad-bets\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" 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