David Martin

Former Head of the Global Interest Rates Group at UBS

default person - David Martin

Listen to the Interview

Download Transcript (PDF)


David Martin, former managing director at UBS, discusses his time working as the head of the Global Interest Rates group in the run-up to the 2008 Financial Crisis. In this oral history, Martin details his work within the Securitized Products area, which involved mortgage-backed securities issued by Government Sponsored Entities such as Fannie Mae and Freddie Mac. Martin offers an overview of how the derivative and securitized products marketplace evolved, and emphasizes the growing inclination of investors to take on risk amid the low interest rate environment of the 2000s. Martin discusses how low interest rates created an asset bubble that inevitably popped, and reflects that although this dynamic may not happen again with mortgages, it might do so with regard to other types of debt. He also touches on the involvement of international institutional investors, as well as other investment and market dynamics, in accelerating the momentum of the crisis.

Date Recorded:
October 30, 2020

Interviewed by:
Maria Paz Rios


David S. Martin worked as a Managing Director at UBS from 1998 to 2007 where he headed the Global Interest Rates group and also served within the Investment Bank Board. Following his time at UBS, Martin went to work for Barclays in 2008 as a Managing Director for the Principal Mortgage Trading Group (PMTG), and then transitioned to BTG Pactual, where he served as a Managing Partner from 2009-2015. Martin began his career within Salomon Brothers, and also held roles within PaineWebber and Bear Stearns previous to his time at UBS. He has a Bachelor of Science degree in Applied Mathematics and Computer Science from Carnegie Mellon University.

Annotated Bibliography

Puzzanghera, Jim. “U.S., UBS agree to $885-million settlement over mortgage bonds.” Los Angeles Times. Last modified July 25, 2013.

UBS and the FHFA reached an $885-million settlement over the case the FHFA brought forward in 2011 claiming UBS had misrepresented the mortgage bonds it had sold to Fannie Mae and Freddie Mac, resulting in losses that helped push Fannie Mae and Freddie Mac near bankruptcy.

In re: UBS AG Securities Litigation (District Court, S.D. New York). “Defendants’ Memorandum of Law in Support of Their Motion to Dismiss the Amended Consolidated Securities Class Action Complaint Pursuant to Rules 9(b), 12(b)(2), and 12(b)(6).” December 15, 2011.

In this court document submitted for the case made by FHFA against UBS and its executives, the argument is made that the only alleged misstatements Martin and another colleague made was at a “Fixed Income Investor Day” conference when they allegedly made statements about the quality and content of UBS’ risk management policy alongside that should be construed as “classic puffery,” not as grounds for a securities fraud claim.

Mccue, Dan. “Fannie & Freddie Sue UBS for $900 Million.” Courthouse News Service. Last modified July 28, 2011.

The lead plaintiff in the case, the Federal Housing Finance Agency (FHFA) claimed that UBS and its former executives, Martin included, violated U.S. securities laws by omitting information or by providing false information to Fannie Mae and Freddie Mac which resulted in their purchase of multiple UBS-sponsored mortgage-backed securities that resulted in losses.

In re: UBS AG Securities Litigation (District Court, S.D. New York). “Amended Consolidated Securities Class Action Complaint.” May 8, 2009.

In this court document submitted for the case made by FHFA against UBS and its executives, Martin is accused of misrepresenting UBS’ participation in riskier practices in presentations and of being aware of issues with UBS’ exposure to subprime-backed assets as early as the fourth quarter of 2006.

Giannone, Joseph. “UBS ousts credit executives after big losses.” Reuters. Last modified October 11, 2007.

The article notes Martin’s then role as the global head of interest rate products at UBS and the losses their mortgage and asset-backed trading operations suffered during the U.S. subprime mortgage crisis that year. It describes how Martin, alongside another fixed-income executive, were let go from UBS as UBS made a number of internal moves, including the combination of their mortgage and asset-backed securities groups with another securitized products team to create a new real estate and securitization group under new leadership.

Boyd, Roddy. “Subprime Snuffs UBS Exects.” New York Post. Last modified October 11, 2007.

This article also describes the departures of Martin and the head of UBS’ collateralized debt obligation unit after the firm posted a quarterly loss because of its exposure to areas of the bond market that had collapsed. At the time, UBS held approximately $19 billion worth of subprime mortgage-backed securities.