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New Federal Judge: Nomura liable in crap loans sold to Fannie and Freddie
NY Times:

Many on Wall Street have long argued that the banks did not generally break the law when they packaged shoddy mortgages and sold them to investors in the lead-up to the financial crisis of 2008.

But on Monday, in the starkest of terms, a federal judge dealt a strong blow to that version of history. She ruled that two banks misled Fannie Mae and Freddie Mac in selling them mortgage bonds that contained numerous errors and misrepresentations.

“The magnitude of falsity, conservatively measured, is enormous,” Judge Denise L. Cote of Federal District Court in Manhattan wrote in a scathing 361-page decision.

The ruling came in a closely watched case brought by the government against the Japanese bank Nomura Holdings and Royal Bank of Scotland. They were the only two of 18 financial firms that took their case to trial, arguing that it was the housing crash, and not deceptive loan documents, that caused the bonds to collapse.

The other firms — including Goldman Sachs and Bank of America — settled, together paying nearly $18 billion in penalties but avoiding a detailed public airing of their conduct.

The government, under pressure to hold Wall Street accountable after the crisis, has pursued a wide range of actions against domestic and foreign banks. Agencies including the Justice Department and the Securities and Exchange Commission have reached multibillion settlements.

But some of the government’s biggest wins — including its victory on Monday — have come from an unlikely source: the Federal Housing Finance Agency, a relatively obscure Washington entity set up to oversee Fannie Mae and Freddie Mac, the beleaguered government-sponsored enterprises rescued by taxpayers in September 2008.

The agency’s lawyers have aggressively pursued the banks, helping the government secure big-dollar settlements. But unlike the relatively opaque settlements, the trial against Nomura and R.B.S. opened a window into the behavior of banks heavily involved in subprime mortgages at the peak of the housing boom.

[...]


Nomura is appealing, of course.

Cheers,
Scott.
New No it's not
Referring to your last line, not the subject. :-)
--

Drew
New That's one of those words that invites misinterpretation, isn't it?
"Inflammable" is another.

:-)

Cheers,
Scott.

     Federal Judge: Nomura liable in crap loans sold to Fannie and Freddie - (Another Scott) - (2)
         No it's not - (drook) - (1)
             That's one of those words that invites misinterpretation, isn't it? - (Another Scott)

We fly with a sort of irrational confidence.
32 ms