NEW YORK—Two UBS AG units have agreed to pay $230 million to settle allegations that the bank peddled toxic residential mortgage-backed securities to unsuspecting investors in the run-up to the financial crisis of 2008, New York Attorney General Eric Schneiderman said.
The deal earmarks $189 million for New York homeowners, affordable housing initiatives and community reinvestment programs, with another $41 million in cash going to New York state, Law 360 reported.
Schneiderman’s office focused on 15 securitizations backed by subprime collateral worth over $10 billion.