The financial firms include Barclays Capital; BNP Paribas Securities; Credit Suisse Securities (USA); Deutsche Bank Securities; Edward D. Jones; Goldman, Sachs; RBS Securities; and UBS Securities.
The FDIC, which acts as a receiver for failed banks, alleged that the firms had violated federal and state securities law based on misrepresentations in the offering documents for 21 Countrywide Financial RMBS purchased by the five failed banks.
The FDIC as receiver for failed financial institutions may file lawsuits against firms whose actions have led to losses for those institutions in order to maximize recoveries.
Between November 2011 and August 2012, the FDIC filed six lawsuits for violations of federal and state securities laws in connection with the sale of the 21 RMBS to the five failed banks.
However, the details on how much each of the eight firms paid to settle the claims have not been disclosed.
Denying the liability, the defendants reached an accord to prevent uncertainty and an increase in cost of litigation.
The settlement funds will be distributed among five failed bank receiverships such as Colonial Bank of Montgomery, Alabama; Franklin Bank, S.S.B. of Houston, Texas; Guaranty Bank of Austin, Texas; Security Savings Bank of Henderson, Nevada; and Strategic Capital Bank of Champaign, Illinois.
In February, Morgan Stanley agreed to pay $62.95m to resolve claims which alleged that the investment bank had submitted misrepresentations in the offering documents for 14 RMBS purchased by the three failed banks.
The FDIC as receiver for the three failed banks filed four lawsuits from February 2012 to January 2014 against Morgan Stanley and other defendants for violations of federal and state securities laws in connection with the sale of RMBS to the three failed banks.
Image: The FDIC’s satellite campus in Arlington, Virginia. Photo courtesy of Coolcaesar/Wikipedia.
