InfoBytes Blog
New York Attorney General reaches $230 million settlement for international company’s RMBS misconduct
On March 21, the New York Attorney General announced a $230 million settlement with two divisions of an international financial services company to resolve allegations that the company made misrepresentations in the sale of residential mortgage-backed securities (RMBS) in violation of New York’s Martin Act and Section 63(12) of New York’s Executive Law. According to the settlement agreement, the investigation focused on 15 securitizations sold by the company between 2006 and 2007. In addition to the alleged misrepresentations in each of the securitizations’ prospectus and prospectus supplements, the company also included loans in the sales portfolio that diligence reports flagged for underwriting and valuation issues. The $230 million settlement includes $41 million to New York State and $189 million to consumer relief programs.