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RBS faces $4.9B settlement over mortgage-backed securities

Joe Mont | August 15, 2018

The Justice Department this week announced a $4.9 billion settlement with The Royal Bank of Scotland Group RBS) resolving federal civil claims that it misled investors in the underwriting and issuing of residential mortgage-backed securities (RMBS) between 2005 and 2008.

The penalty is the largest imposed by the Justice Department for financial crisis-era misconduct at a single entity under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which authorizes the federal government to seek civil penalties against financial institutions that violate various predicate criminal offenses, including wire and mail fraud.

“Many Americans suffered lasting economic harm as a result of the 2008 financial crisis,” Acting Associate Attorney General Jesse Panuccio said in a statement. “This settlement holds RBS accountable for serious misconduct that contributed to that financial...

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