UBS first bank sued over sub-prime loss

HSH Nordbank, one of Germany’s biggest banks, is suing UBS, over $US500m
(£254m) of collateralised debt obligations (CDOs) in what lawyers say will
probably be the first of many such cases in Europe.

The Times reports HSH is suing for losses of more than $US200m,
accusing UBS of putting risky American mortgages instead of low-risk assets into
a CDO which it sold to the German bank in 2002.

HSH plans to file a claim against UBS in a court in New York this month.
According to lawyers, similar cases had been brought in the US but none as yet
by a European investor.

One lawyer who specialises in CDOs said that smaller banks ‘might be the next
to have a go at this kind of suit’.

story in The Times

Related reading