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FDIC Announced US$190 Million Settlement over RMBS Claims

The Federal Deposit Insurance Corporation (FDIC) as receiver for five failed banks today announced a US$190 million settlement of certain residential mortgage-backed securities (RMBS) claims with eight large financial institutions including Barclays Capital Inc., BNP Paribas Securities Corporation, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Edward D. Jones & Co., L.P., Goldman, Sachs & Co., RBS Securities Inc., and UBS Securities LLC.

The settlement resolves federal and state securities law claims based on misrepresentations in the offering documents for 21 Countrywide RMBS purchased by the five failed banks, which were Colonial Bank in Montgomery, Alabama; Franklin Bank in Houston; Guaranty Bank in Austin, Texas; Security Savings Bank in Henderson, Nevada; and Strategic Capital Bank in Champaign, Illinois. The FDIC as receiver for failed financial institutions may sue professionals and entities whose conduct resulted in losses to those institutions in order to maximize recoveries. From November 2011 through August 2012, the FDIC as receiver for the five failed banks filed six lawsuits for violations of federal and state securities laws in connection with the sale of the 21 RMBS to the failed banks. The FDIC has filed a total of 19 RMBS lawsuits on behalf of eight failed institutions seeking damages for violations of federal and state securities laws.

News Characteristics

Date : Jun 02, 2016
Region : North America
Industry : Mortgage Companies
Function : Risk Management
Sub-Function : Fraud Management