The Federal Housing Finance Agency (FHFA), as conservator of Fannie Mae and Freddie Mac, today announced it has recovered nearly $8 billion on behalf of taxpayers in 2013 through settlements with financial institutions that sold private-label securities (PLS) to Fannie Mae and Freddie Mac between 2005 and 2007. FHFA sued 18 financial institutions in 2011 alleging securities law violations, and in some cases, fraud.
In 2011, the Federal Housing Finance Agency initiated litigation against 18 financial institutions involving allegations of securities law violations and, in some instances, fraud in the sale of private- label securities (PLS) to Fannie Mae and Freddie Mac. Below is a synopsis of the status of each case, with amounts of any settlements reached in 2013, including a non-litigation settlement. Settlement amounts result from calculating various factors, including statutory calculations, number of securities, unique circumstances of each matter and litigation risks.
PLS Litigation Settlements
1. General Electric Company $6.25 million
2. CitiGroup Inc. $250 million
3. UBS Americas, Inc. (Union Bank of Switzerland) $885 million
4. J.P. Morgan Chase & Co. $4 billion
5. Deutsche Bank AG $1.925 billion
6. Ally Financial, Inc. $475 million
Non-Litigation PLS Settlement
Wells Fargo Bank, N.A. $335.23 million
Remaining PLS Cases
Southern District of New York Cases:
7. Barclays Bank PLC
8. Bank of America Corp.
9. Credit Suisse Holdings (USA) Inc.
10. First Horizon National Corp.
11. Goldman Sachs & Co.
12. HSBC North America Holdings, Inc. (Hong Kong Shanghai Banking Corp.)
13. Merrill Lynch & Co.
14. Morgan Stanley
15. Nomura Holding America, Inc.
16. SG Americas (Societe Generale)
District of Connecticut Case:
17. The Royal Bank of Scotland Group, PLC
Central District of California Case:
18. Countrywide Financial Corporation