Deutsche Bank reaches $95 million RMBS settlement with Maryland

The state of Maryland announced last week that it reached a $95 million settlement with Deutsche Bank over claims that Deutsche Bank misled investors about its securitization and sale of residential mortgage-backed securities and collateralized debt obligations during the run-up to the financial crisis.

The settlement, which was announced last week by the office of Maryland Attorney General Brian Frosh, includes a requirement that Deutsche Bank provide $80 million in relief to consumers in Maryland.

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Societe Generale fined $50 million for pre-crisis RMBS fraud

As the Obama administration prepared to clean out its collective desks last week, the government announced that it wasn’t quite done dealing with with the events that led to the financial crisis.

In those last few days, the Obama administration announced multi-billion dollar settlements with two foreign banks, Deutsche Bank and Credit Suisse, for each bank’s mortgage securitization practices leading up to the housing crisis.

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It’s official: Deutsche Bank reaches $7.2 billion RMBS settlement

Late last year, Deutsche Bank announced that it reached a $7.2 billion settlementwith the Department of Justice in connection with the bank’s issuance and underwriting of residential mortgage-backed securities between 2005 and 2007.

Although the bank made the announcement in late December, the settlement was not official, but it is now.

On Tuesday, the Department of Justice announced that it reached a final settlement with Deutsche Bank for $7.2 billion, matching the figure Deutsche Bank disclosed in December.

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Moody’s reaches $864 million settlement over RMBS credit ratings

Moody’s Corp. agreed to pay nearly $864 million to settle claims for its role providing credit ratings for Residential Mortgage-Backed Securities and Collateralized Debt Obligations that contributed to the financial crisis.

On Friday, the Department of Justice, 21 states, and the District of Columbia announced the settlement agreement with Moody’s Investors Service Inc.,Moody’s Analytics Inc., and their parent, Moody’s Corporation, resolving pending state court lawsuits in Connecticut, Mississippi, and South Carolina, as well as potential claims by the Justice Department, 18 states and the District of Columbia.

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Wells Fargo braces for losses as prosecutors delve into possible mortgage abuses

Wells Fargo & Co. is in talks with a group of federal and state prosecutors examining potential abuses related to mortgages as it continues to grapple with investigations and public outrage from its sales-practices scandal.

The bank disclosed in its most recent quarterly securities filing posted Thursday that it is in discussions with the Residential Mortgage-Backed Securities Working Group of the Financial Fraud Enforcement Task Force. That group, which includes the Justice Department, has levied billions of dollars in fines on other big U.S. banks, including a $16.65 billion payout from Bank of America Corp.BAC, +0.00%   and $13 billion from J.P. Morgan Chase & Co. JPM, -0.44%

The RMBS task force has raised “potential theories of liability” with Wells FargoWFC, +0.22%   related to certain mortgage practices, according to the bank’s filing. The bank had said in previous filings that it was responding to requests for information from government agencies related to the origination, underwriting and securitization of certain mortgages. The bank has produced documents for the Justice Department, but people familiar with the matter have previously said the process wasn’t progressing.

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RBS Unit Will Pay $120M To Settle Conn. RMBS Investigation

Law360, New York (October 3, 2016, 6:10 PM EDT) — A Royal Bank of Scotland Group PLC unit will pay $120 million to the state of Connecticut to end a four-year investigation into the bank’s underwriting of residential mortgage-backed securities in the years before the 2008 financial crisis, the state’s attorney general announced Monday.

In what is the largest settlement sum ever paid to Connecticut, RBS Securities Inc. agreed to pay $250,000 to the state Department of Banking and the rest into the state’s general fund, Attorney General George Jepsen and DOB Commissioner Jorge Perez said.

Source: Law360

SEC fines, bans former Goldman Sachs head RMBS trader for fraud

But not one bankster execs are criminally charged…

The former head trader of residential mortgage-backed securities for Goldman Sachsrepeatedly lied to the firm’s clients and overcharged mortgage bond buyers, generating millions of dollars in extra revenue for both Goldman Sachs and himself in the process, the Securities and Exchange Commission stated Tuesday.

According to the SEC, Edwin Chin, who served as Goldman Sachs’ head RMBS trader from 2010 through 2012, agreed to settle charges brought by the SEC that he lied to clients about the prices of RMBS deals, frequently misrepresenting not only the prices that Goldman Sachs paid for the mortgage bonds, but whether the bonds were sold out of Goldman Sachs’ inventory or not.

As part of the settlement, Chin will pay a fine of $400,000 and is barred from working in the securities industry for at least two years, the SEC said.

According to a statement from Goldman Sachs, the firm fired Chin in 2012 after the allegations of his misconduct first surfaced.

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JPMorgan’s $4.5B RMBS Investors Deal Gets Judge’s Nod

Law360, Los Angeles (August 12, 2016, 10:12 PM ET) — A New York state judge on Friday granted approval of a $4.5 billion settlement to resolve institutional investors’ claims that JPMorgan & Chase Co. misled consumers into buying risky residential mortgage-backed securities in the lead-up to the financial crisis in 2007, saying a lone objector’s argument lacked merit.

New York Supreme Court Judge Marcy S. Friedman found that the 2013 deal to resolve claims brought by holders of the securities backed by subprime mortgages that went bust during the financial crisis was negotiated in good faith…

Source: Law360

Morgan Stanley takes first steps in offering $400M in consumer relief in New York

Earlier this year, Morgan Stanley agreed to a $3.2 billion settlement over its “deceptive” mortgage bond practices in the run-up to the financial crisis.

Part of that settlement included a commitment to provide $400 million in consumer relief for New York residents affected by Morgan Stanley’s alleged actions, set to be distributed by the end of September 2019.

Now, Morgan Stanley is taking its first steps to fulfill that commitment, by providing principal forgiveness to a handful of borrowers as a “test drive” of its relief plan, according to a new report from Eric Green, the independent monitor of the consumer-relief portion of the settlement.

The settlement stems from Morgan Stanley’s alleged misrepresentations about the security and safety of residential mortgage-backed securities it sold before the financial crisis.

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Citigroup Dodges Investors’ $800M RMBS Fraud Suit

Aug. 5 — Citigroup Inc. investors can’t revive a lawsuit alleging they were wrongfully induced to hold on to company stock during the financial crisis, the U.S. Court of Appeals for the Second Circuit ruledAug. 5 ( AHW Inv. P’ship v. Citigroup Inc., , 2016 BL 253579, 2d Cir., No. 13-4488-cv(L), 8/5/16 ).

The stockholders claimed that the bank made fraudulent and negligent misrepresentations about residential mortgage-backed securities between May 2007 and March 2009. The plaintiffs alleged that they lost more than $800 million by holding on to their stock because of the misstatements.

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