From “LivingLies”

Pursuit vs. UBS Drills Down to Real Benefits to Intermediaries While Real Parties — Investors and Homeowners — get the shaft UBS090909

UBS is a diversified global financial services company . . . main headquarters in Basel and Zurich, Switzerland. It is the world’s second largest manager of private wealth assets, it is the second-largest bank in Europe and has a major presence in the United States. It is present in all major financial centers worldwide.

Moody’s Corporation is “a provider of (i) credit ratings and related research, data and analytical tools, (ii) quantitative credit risk measures, risk scoring software, and credit portfolio management solutions and (iii) securities pricing software and valuation models” (10-K from 3/2/09). They operate their business in two segments—Moody’s Investor Service (MIS), which primarily rates debt securities in the global capital markets, and Moody’s Analytics (MA), which provides “quantitative credit risk scores, credit processing software, economic research, analytical models, financial data, securities pricing software and valuation models, and specialized consulting services” (10-K from 3/2/09). The foremost competitor for MIS is McGraw-Hill Company’s Standard and Poor’s.

This is a case of an investor suing the underwriter of the mortgage backed bonds purchased as “investment grade securities . . . ” underwriters wear so many hats that it is impossible to track them without nailing them down in discovery and motions to compel.

It is only when the real flow of documents and the real flow of money is analyzed that you can see the pattern of deception designed to screw the investors, screw the homeowners and run with the money and now, through illegal and improper foreclosures, they run with the property too.

Excerpt from “Opinion,” September 2009.

“Based on the above-mentioned evidence, the court finds that the Plaintiffs’ have presented sufficient evidence to satisfy the probable cause standard with respect to their claim that UBS was in possession of superior knowledge that was not readily available to the Plaintiffs.

This material nonpublic information related to rating agency downgrades that would significantly decrease, if not render worthless, the CDO Notes it was selling Pursuit. Further, UBS was aware the Pursuit was only seeking to invest in CDO Notes rated “investment grade,” and UBS knew that byinvesting in the subject CDO Notes, Pursuit was acting on the basis of misleading information. Moreover, because UBS was in the position of “Super-senior Noteholder” in the structure of these CDOs, such ratings downgrades, while working to the detriment of buyers like the Plaintiffs, could work to the benefit of sellers like UBS in the super-senior position, because super-seniors have first dibs on whatever payments are made on a CDO. A UBS Securities LLC credit analyst explained it in an October 16, 2007 email sent to Morelli and others. Writing about the billions of dollars in Moody’s downgrades, downgrades that were now public knowledge,

the UBS analyst wrote, “These bonds [subject to downgrades] appear in countless CDOs.

The downgrades were more severe than what the market seemed to anticipate . . . The downgrades could constitute a triggering event that would be an Event of Default for various for various CDOs. If this occurs, then it may prove salutary for the Super-senior holders [like UBS] as more cash flow would be preserved for their protection.