RBS to Pay More Than $153M to Settle Federal Securities Law Violations

RBS to Pay More Than $153M to Settle Federal Securities Law Violations

 NEW HAVEN, Conn. — (Mealey’s) RBS Securities Inc. will pay more than $153 million to settle claims that it misrepresented the investment quality of a $2.2 billion residential mortgage-backed security (RMB) offering it was promoting in violation of federal securities law, according to court documents filed Nov. 7 in Connecticut federal court (Securities and Exchange Commission v. RBS Securities Inc., No. 13-1643, D. Conn.).

Under the terms of the settlement, which are subject to court approval, RBS, formerly known as Greenwich Capital Markets Inc., will pay disgorgement in the amount of $80,352,639, plus prejudgment interest in the amount of $25,190,552 and a civil penalty of $48,211,583 for violating Sections 17(a)(2) and (3) of the Securities Act of 1933.

The Securities and Exchange Commission filed its complaint against RBS today in the U.S. District Court for the District of Connecticut, alleging that RBS violated the Securities Act by issuing a series of false and misleading statements regarding the quality and safety of the investment in the RMB by stating that the subprime loans backing the offering were “generally” in compliance with the lender’s underwriting guidelines.

RBS will not admit or deny guilt under the terms of the settlement.

The SEC is represented by John B. Hughes of the U.S. Attorney’s Office in New Haven.

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