The United States Department of Justice (DOJ) has slammed UBS over the bank’s untimely document production and defense witness disclosures in a lawsuit over the sale of residential mortgage-backed securities (RMBS).

On December 8, 2021, the DOJ filed a motion in the New York Eastern District Court, requesting an extension to discovery deadlines. In the document, seen by FX News Group, the DOJ seeks a four-month extension of fact discovery and a corresponding extension of all other deadlines in this action. The fact discovery was scheduled to end on December 10, 2021.

The DOJ explains that, throughout 2021, at the back end of the discovery period, UBS has produced over 900,000 documents encompassing over 6 million pages to the United States. That such voluminous records have been produced so recently is troubling, according to the Government. By UBS’ own admission, the materials are responsive to discovery requests propounded in early 2019.

While the United States understands that witnesses have scheduling challenges and commitments, UBS did not offer any dates for any witnesses during the months of September and October of 2021. The DOJ asserts that this purported lack of availability has created an unnecessary backlog of depositions.

Indeed, UBS has already proposed to schedule depositions in late December and January, after the current discovery deadline. Nonetheless, of the 34 depositions noticed by the United States, 14 remain to be scheduled. Given scheduling difficulties to date, it is unreasonable to anticipate that these remaining depositions can be completed by January 31, 2022.

UBS’ untimely document production and defense witness disclosures have compromised the government’s ability to discover the evidence that UBS will use in motion practice and at trial in defending this case. The requested extension is not likely sufficient to cure this problem of UBS’ making. Nonetheless, although circumstances warrant a more substantial extension, this important fraud case must go to trial in the nearest term possible, the DOJ says.

Let’s recall that the United States Government took UBS AG and several of its United States affiliates to Court in November 2018 for alleged fraud in connection with the sale of residential mortgage-backed securities in 2006-2007.

The complaint alleges that UBS’s actions violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), based on mail fraud, wire fraud, bank fraud and other misconduct.

As detailed in the complaint, from 2006 through 2007, UBS misled investors about the quality of billions of dollars in subprime and Alt-A mortgage loans backing 40 RMBS deals. Specifically, in publicly filed offering documents, UBS knowingly misrepresented key characteristics of the loans, thereby concealing the fact that the loans were much riskier and much more likely to default than UBS represented. In the end, the 40 RMBS sustained substantial losses.

The DOJ said back then that the fraudulent actions by UBS contributed to the 2008 financial crisis.