Barclays agrees to pay $2 billion penalty for selling fraud securities made up of bad home loans
Barclays Capital and some of its affiliates have agreed to pay a $2 billion fine for improperly selling securities backed by home mortgages, the Justice Department said Thursday.
The feds will now drop a December 2016 civil action that accused the bank of fraudulently selling residential mortgage-backed securities (RMBS) between 2005 and 2007.
Barclays Capital and some of its affiliates have agreed to pay a $2 billion fine for improperly selling securities backed by home mortgages, the Justice Department said Thursday.
The feds will now drop a December 2016 civil action that accused the bank of fraudulently selling residential mortgage-backed securities (RMBS) between 2005 and 2007.
Barclays was accused of misrepresenting some details on $31 billion worth of loans involved in 36 RMBS deals over that time.
More than half of those mortgages later defaulted, leaving investors financially ruined, the Justice Department said.
Kushner business got big loans from bank bigs after W.H. meetings
“The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS,” said Richard Donoghue, U.S. Attorney for New York’s Eastern District.
The 2008 Financial Crisis was largely blamed on questionable RMBS practices, which caused investors around the world to lose billions.
Paul K. Menefee and John T. Carroll, two former Barclays executives named in the suit, also agreed to pay a total $2 million as part of the settlement.
Lawyers for Menefee said the former managing director always believed the case against him “was baseless and should never have been brought.”
FBI looking at potential transfers from Russian banker to NRA
“Solely to put this matter behind him, Mr. Menefee has agreed to a settlement in which he has not admitted any wrongdoing,” attorneys Barry Berk and Dani James said in a joint statement.
Before the financial meltdown, banks typically bought up home mortgages, bundled them into securities and sold to investors with the promise of lucrative returns.
But many loans’ borrowers ended up not being able to pay, or there were problems with the mortgage structure.
Federal prosecutors said Barclays violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Barclays “jeopardized billions of dollars of wealth through practices that were plainly irresponsible and dishonest,” said then-Attorney General Loretta Lynch when the DOJ sued the bank in December 2016.
Several major financial institutions have reached massive settlements with state and federal governments for what prosecutors branded untrustworthy practices.
Royal Bank of Scotland, which still has a Justice Department case pending, has paid $6 billion in RMBS-related settlements as of earlier this month, according to American Banker.
More than half of those mortgages later defaulted, leaving investors financially ruined, the Justice Department said.
Kushner business got big loans from bank bigs after W.H. meetings
“The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors in RMBS,” said Richard Donoghue, U.S. Attorney for New York’s Eastern District.
The 2008 Financial Crisis was largely blamed on questionable RMBS practices, which caused investors around the world to lose billions.
Paul K. Menefee and John T. Carroll, two former Barclays executives named in the suit, also agreed to pay a total $2 million as part of the settlement.
Lawyers for Menefee said the former managing director always believed the case against him “was baseless and should never have been brought.”
FBI looking at potential transfers from Russian banker to NRA
“Solely to put this matter behind him, Mr. Menefee has agreed to a settlement in which he has not admitted any wrongdoing,” attorneys Barry Berk and Dani James said in a joint statement.
Before the financial meltdown, banks typically bought up home mortgages, bundled them into securities and sold to investors with the promise of lucrative returns.
But many loans’ borrowers ended up not being able to pay, or there were problems with the mortgage structure.
Federal prosecutors said Barclays violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
Barclays “jeopardized billions of dollars of wealth through practices that were plainly irresponsible and dishonest,” said then-Attorney General Loretta Lynch when the DOJ sued the bank in December 2016.
Several major financial institutions have reached massive settlements with state and federal governments for what prosecutors branded untrustworthy practices.
Royal Bank of Scotland, which still has a Justice Department case pending, has paid $6 billion in RMBS-related settlements as of earlier this month, according to American Banker.
Posting Komentar