Nomura, RBS Ordered to Pay $806 Million to Housing Agency

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Nomura Holdings Inc. and Royal Bank of Scotland Group Plc were ordered to pay $806 million in damages to government-owned mortgage companies over misleading securities pitches.

A federal judge in New York on Friday ordered the banks to pay the full amount requested by the Federal Housing Finance Agency. U.S. District Judge Denise Cote earlier found the banks liable for “enormous” deception in the sale of mortgage-backed securities.

FHFA has reached $17.9 billion in settlements with other banks, including Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc.

Nomura, based in Tokyo, and Edinburgh-based RBS have agreed to pay in exchange for seven certificates involved in the case, the FHFA said in an earlier filing, though they may still challenge the amount they’re ordered to pay.

Cote issued a 361-page opinion following the first trial of claims that banks sold flawed securities to Fannie Mae and Freddie Mac. In at least 184 of 672 sample loans reviewed, home values were inflated and appraisers didn’t believe the figures they provided were correct, Cote said in that decision.

Jonathan Hodgkinson, a Nomura spokesman, said in a statement that losses by Fannie Mae and Freddie Mac resulted from an unprecedented decline in home prices.

“Nomura takes this situation very seriously and strongly disagrees with the outcome of the case,” Hodgkinson said. “Nomura will continue to vigorously defend its interest in this matter and looks forward to taking its case to the U.S. Court of Appeals.”

Representatives of RBS didn’t immediately respond to a phone message outside regular business hours seeking comment on the judgment.

The case is Federal Housing Finance Agency v. Nomura Holding America Inc., 11-cv-06201, U.S. District Court, Southern District of New York, (Manhattan).

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