UBS vs. DOJ: the Arguments

UBS argues that prosecutors will need to prove that the bank not only defrauded investors, but that it also lied in selling the instruments which led to the losses. 

Misread of U.S. Law

The complaint is rooted in a 1989 bank protection law for federally-insured financial firms, or FIFIs. UBS maintains that only a small portion of the institutes damaged by UBS' RMBS falls under the protection scheme.

The bank counters that prosecutors are mistakenly applying FIFI protection to all RMBS the bank sold in 2006 and 2007 as the crisis loomed. The losses suffered by FIFI firms are lower than UBS' $900 million hit, the bank said.