SEC v. RBS Securities, Inc., Case No. 3:13-cv-01643 (D. Conn.). On November 7, 2013, the SEC announced it filed settled fraud charges against RBS Securities Inc., a subsidiary of the Royal Bank of Scotland plc, in connection with a subprime residential mortgage-backed security (“RMBS”) offering. According to the SEC, RBS claimed that the loans backing the offering “generally” met the lender’s underwriting guidelines. In reality, almost one-third of the loans did not come close to meeting the guidelines and RBS should not have included them in the offering. The relevant guidelines required a consideration of the value of the home relative to the mortgage and the borrower’s ability to repay the loan. The SEC alleges that RBS knew or should have known that a substantial number of loans underlying the offering did not meet the underwriting guidelines. The SEC further alleges that RBS created a misleading impression of the quality of the loans backing the
offering and the likelihood of their repayment. Without admitting or denying the SEC’s charges, RBS consented to entry of a final judgment enjoining it from violating Sections 17(a)(2) and (3) of the Securities Act. The final judgment will also require RBS to disgorge $80.3 million, plus prejudgment interest of $25.2 million, and pay a civil monetary penalty of $48.2 million.
- SEC Charges Microsoft Manager Brian Jorgenson and his Friend Sean Stokke with Insider Trading
- SEC Obtains Emergency Relief against Robert Helms and Janniece Kaelin in Alleged Ponzi Scheme
- SEC Charges Fifth Third Bancorp and its Former CFO Daniel Poston with Fraud for Accounting Practices during the Financial Crisis
- SEC Settles Insider Trading Case against Charles Langston III
- SEC Settles Penny Stock Case Against Curt Kramer for $1.4 Million
Other BraunHagey Blogs