This excerpt taken from the UBS 6-K filed May 23, 2008.
UBS operates in a legal and regulatory environment that exposes it to potentially significant litigation risks. As a result, UBS is involved in various disputes and legal proceedings, including litigation, arbitration, and regulatory and criminal investigations. Such cases are subject to many uncertainties, and their outcome is often difficult to predict, particularly in the earlier stages of a case. In certain circumstances, to avoid the expense and distraction of legal proceedings, UBS may, based on a cost-benefit analysis, enter a settlement even though UBS denies any wrongdoing.
Currently, UBS is responding to a number of governmental inquiries and investigations, and is involved in a number of litigations and disputes, related to the subprime crisis, subprime securities, and structured transactions involving subprime securities. These matters concern, among other things, UBSs valuations, disclosures, write downs, underwriting, and contractual obligations. UBS has been in regular communication with its home country consolidated regulator, the Swiss Federal Banking Commission, regarding some of these issues and others, including the role of internal control units, governance and processes around risk control and valuation of subprime instruments, compliance with public disclosure rules, and the business rationales for the launching and the reintegration of DRCM.
Within the last 12 months, UBS was involved in the following material legal proceedings: