UBS launches lawsuit in retaliation

29 February 2008

UBS has launched a counterclaim against HSH Nordbank after the German bank said it would sue the Swiss investment bank over losses.

HSH Nordbank is attempting to sue UBS for $500 million, blaming it for losses after alleged fraud and wilful negligence.

Now UBS is hitting back at the German bank, protesting that it knew what it was doing when it embarked on a deal that later went sour.

In a statement published in the Times, UBS said: "This suit is based on a structured transaction with HSH, a professional and knowledgeable German bank.

"We discussed and negotiated the transaction over a period of several months with the counterparty and agreed to all of its conditions. We executed all of our contractual obligations and the transaction is not in default."

UBS added that it was "comfortable with our position with regards to the coming legal proceedings".

In court papers HSH accused the Swiss investment bank of "fraudulent acts" and "wilful breaches of duty" after it lost $275 million on a collateralized debt obligation managed and sold by UBS called North Street 4.

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