The banks could be subject to a fine of almost half a billion dollars, after District Judge Denise Cote in Manhattan ruled that false statements were made when selling the securities to Fannie Mae and Freddie Mac in 2008, the Telegraph wrote.
The ruling could see US regulator the Federal Housing Finance Agency (FHFA), which is acting on behalf of Fannie and Freddie, recover around $450m (£289m) in damages from the two banks.
In her decision, Judge Cote said: “The offering documents did not correctly describe the mortgage loans. The magnitude of falsity, conservatively measured, is enormous.”
A number of banks sold mortgage-backed securities to Fannie Mae and Freddie Mac in the run up to the financial crisis which totalled over $200bn. The most recent ruling is the first to reach trial out of the 18 the regulator filed in 2011, where RBS and Nomura underwrote some £2bn of the securities.
The FHFA said it was pleased with the court’s decision and was reviewing the court’s ruling. Judge Cote has ordered the regulator to submit a proposed judgement with updated damages figures based on her ruling by Friday.
“It is clear the court found that the facts presented by FHFA were convincing. FHFA looks forward to submitting proposed damages calculated under the formulae applied in the court’s opinion,” it said.
Nomura bank said it planned to appeal.
