On Monday, U.S. District Judge Denise Cote ruled that two banks — Japan's Nomura Holdings and Britain's Royal Bank of Scotland — fraudulently sold faulty mortgages to Freddie Mac and Fannie Mae leading up to the 2008 housing crash. "The magnitude of falsity, conservatively measured, is enormous," Cote wrote in what The New Times calls her "scathing 361-page decision."
Nomura and RBS were the only two of 18 large banks that didn't settle with the Federal Housing Finance Agency; the other 16 avoided airing their presumably dirty laundry in court by collectively paying almost $18 billion in penalties. In the jury-less trial, Coat heard evidence that two-thirds of the mortgages RBS and Nomura packaged into securities had underwriting defects. The FHFA is expected to ask for $500 million in compensation. Namura says it will appeal the ruling.
In tangentially related news, The Wall Street Journal reports that top executives from seven of the largest U.S. banks met on March 31 to discuss the "anti-Wall Street rhetoric already bubbling up on the 2016 campaign trail" and brainstorm ways to "push back against the prevailing narrative that banks are bad." There won't be "a new ad campaign or lobbying blitz, people familiar with the discussions" told The Journal, in part because "many bank officials are skeptical they can do much to counteract critics without triggering more damaging backlash." Peter Weber
see more: http://theweek.com/speedreads/554539/federal-judge-holds-2-banks-accountable-selling-fraudulent-mortgages
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