{"id":1963,"date":"2017-12-29T17:54:35","date_gmt":"2017-12-29T23:54:35","guid":{"rendered":"https:\/\/www.institutionalinvestorsecuritiesblog.com\/?p=1963"},"modified":"2022-03-22T15:09:53","modified_gmt":"2022-03-22T20:09:53","slug":"royal-bank-scotland-settles-mortgage-backed-securities-fraud-case-brought-pension-funds-125m","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/royal-bank-scotland-settles-mortgage-backed-securities-fraud-case-brought-pension-funds-125m\/","title":{"rendered":"Royal Bank of Scotland Settles Mortgage-Backed Securities Fraud Case Brought by Pension Funds for $125M"},"content":{"rendered":"

According to Reuters<\/em>, Royal Bank of Scotland Group plc (RBS) has settled a mortgage-backed securities fraud case brought by the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) for $125M. The settlement resolves claims alleging that the bank made misrepresentations when selling MBSs to the pension funds, which contend that they sustained millions of dollars in losses as a result.<\/p>\n

According to California Attorney General Xavier Becerra, a probe by his office determined that the descriptions the firm provided to investors \u201cfailed to accurately disclose the true characteristics\u201d of many of the mortgages backing the securities, but that RBS, which knew about the alleged misrepresentations, did nothing to remedy them. The state AG\u2019s investigation also found that RBS did not conduct the necessary due diligence to eliminate the loans that were of \u201cpoor quality.\u201d Becerra contends that RBS purposely misled CalPERS and CalSTRS to enrich itself. He noted that the MBS fraud settlement gives back the money to the pension funds that the bank \u201cwrongfully took” from them.<\/p>\n

Already, The California AG\u2019s office has gotten back more than $1B over securities that were sold to the state\u2019s public pension funds, which sustained losses during the economic crisis of 2008. Last year, $150M was recovered from Moody\u2019s, the credit rating agency. In 2015, $210M was recovered from another credit rating agency, Standard & Poor\u2019s. Other banks to have settled include Citigroup (C)<\/a> for $102M, Bank of America <\/a>for $300M and J.P. Morgan Chase (JPM) <\/a>for $300M.<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

According to Reuters, Royal Bank of Scotland Group plc (RBS) has settled a mortgage-backed securities fraud case brought by the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) for $125M. The settlement resolves claims alleging that the bank made misrepresentations when selling MBSs to the pension funds, which contend […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3752,3757,3957,4036],"tags":[],"class_list":["post-1963","post","type-post","status-publish","format-standard","hentry","category-financial-firms","category-mortgagebacked-securities","category-pension-funds","category-royal-bank-of-scotland"],"yoast_head":"\nRoyal Bank of Scotland Settles Mortgage-Backed Securities Fraud Case Brought by Pension Funds for $125M — Investor Lawyers Blog — December 29, 2017<\/title>\n<meta name=\"description\" content=\"According to Reuters, Royal Bank of Scotland Group plc (RBS) has settled a mortgage-backed securities fraud case brought by the California Public — December 29, 2017\" 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