Barclays has agreed to pay $2bn (£1.4bn) to settle a US civil action related to the mis-selling of residential mortgage-backed securities (RMBS) in the run-up to the financial crisis.
Two former Barclays executives also agreed to pay $2m to resolve claims brought against them, the US Department of Justice said on Thursday
The complaint, filed in December 2016, Barclays caused billions of dollars in losses to investors by engaging in a fraudulent scheme to sell 36 RMBS, and that it misled investors about the quality of the mortgage loans backing those deals.
It alleged that Barclays' investment banking division, Barclays Capital, had committed mail fraud, wire fraud, bank fraud, and other misconduct.
“This settlement reflects the ongoing commitment of the Department of Justice, and this Office, to hold banks and other entities and individuals accountable for their fraudulent conduct,” stated United States Attorney Donoghue. “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.”
“The actions of Barclays and the two individual defendants resulted in enormous losses to the investors who purchased the Residential Mortgage-Backed Securities backed by defective loans,” stated FHFA-OIG Inspector General Wertheimer. “Today’s settlement holds accountable those who waste, steal or abuse funds in connection with FHFA or any of the entities it regulates. We are proud to have partnered with the US Department of Justice and the US Attorney’s Office for the Eastern District of New York on this matter.”
More follows…
- More about:
- Barclays
- Financial Crisis
Reuse content Read the Original Article