RBS to pay $125 million to settle California mortgage bond claims

From Reuters - December 23, 2017

(Reuters) - Royal Bank of Scotland Group Plc will pay $125 million to resolve claims that it made misrepresentations while selling mortgage-backed securities to two large California pension funds, the states attorney general has announced.

The settlement announced on Friday by California Attorney General Xavier Becerra was the latest by RBS aimed at resolving claims stemming from its sale of mortgage-backed securities, which were at the heart of the 2008 financial crisis.

Becerras office said those securities were typically backed by thousands of mortgage loans of varying quality in which the buyer relied on the assurance that those mortgages were carefully screened and were not overly risky.

Becerras office also said its investigations found that RBS failed to accurately disclose to investors the true traits of many of the thousands of mortgages underlying the securities.

The probe also found that those misrepresentations led to millions of dollars in losses to the California Public Employees Retirement System and the California State Teachers Retirement System, Becerras office said.

RBS decided to mislead Californias pension funds in order to line its own pockets - plain and simple, Becerra said in a statement.


Continue reading at Reuters »