An investment bank agreed to pay over $2 billion to settle claims that it engaged in a fraudulent scheme to sell residential mortgage-backed securities ("RMBS") and that it misled investors about the quality of the mortgage loans backing those deals.
In a settlement filed in the U.S. District Court for the Eastern District of New York, Barclays Capital, Inc. ("Barclays") agreed to pay a civil penalty to resolve allegations that it had misinformed investors concerning the worth of loans involved in certain RMBS deals. According to the Department of Justice, numerous underlying loans defaulted, resulting in significant losses for investors. Barclays was accused of securitizing numerous loans despite defects, and inaccurately representing the creditworthiness of borrowers and the value of mortgaged properties.
As part of the settlement, two former Barclays executives also agreed to pay a combined penalty of $2 million.
The defendants made no admissions as to any liability or wrongdoing in connection with the settlement agreement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
