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 (the Enterprises). Some defendants were involved in more than one of these matters. One company settled various claims or agreed to delay the statute of limitations. Below is a list of the cases with amounts of PLS settlements and a litigated resolution (#19) reached between 2013 through July 2018. Settlement of various representation and warranty and collateral matters associated with the PLS suits resulted in obtaining another $335 million.
Settlement amounts result from various factors, including statutory requirements, number of securities, unique circumstances of each matter and calculation of litigation risks.
| PLS Litigation Settlements | |
|---|---|
| Institution | Settlement Amount |
| 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 |
| 7. Morgan Stanley | $1.25 billion |
| 8. SG Americas (Societe Generale) | $122 million |
| 9. Credit Suisse Holdings (USA) Inc. | $885 million |
| 10. Bank of America Corp. 11. Merrill Lynch & Co. 12. Countrywide Financial Corporation | $5.83 billion |
| 13. Barclays Bank PLC | $280 million |
| 14. First Horizon National Corp. | $110 million |
| 15. RBS Securities, Inc. (in Ally action) | $99.5 million |
| 16. Goldman Sachs & Co. | $1.2 billion |
| 17. HSBC North America Holdings, Inc. (Hong Kong Shanghai Banking Corp.) | $550 million |
| 18. Royal Bank of Scotland Group, plc | $5.5 billion |
| 19. Nomura Holdings America, Inc. | $846.8 million |
| Non-Litigation PLS Settlements | |
|---|---|
| Institution / Category | Settlement Amount |
| Wells Fargo Bank, N.A. | $335.23 million |
| Ancillary Recoveries (noted above) | $335 million |
| Total (rounded) | $24.9 billion |
| Category | Amount |
|---|---|
| Example Item | $100 |
[NOTE: The Enterprises have other claims, such as where they are participants along with other parties in purchases covered by trusts. Settlements discussed here only involve PLS cases initiated by FHFA].
Contacts:
Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030