The British multinational investment bank and financial services company, Barclays has agreed to settle a lawsuit for $2 billion (£1.42) with the U.S. Department of Justice (DOJ) related to the sale of residential mortgage-backed securities (RMBS).

The Brittish bank agreed to pay the penalties without admitting any wrongdoing to resolve allegations over its role in the sale of RMBS’s and the subsequent collapse of the US real estate market in 2005-2007. The investigation centered around 36 RMBS deals worth $31 billion in mortgages, of which more than 50% defaulted.

The DOJ alleged that Barclays misrepresented the quality of loans tied to the RMBS.

U.S. Attorney Richard Donoghue for the Eastern District of New York said, “The substantial penalty Barclays and its executives have agreed to pay is an important step in recognizing the harm that was caused to the national economy and to investors.”

Barclays said the settlement resolves “all actual and potential civil claims” by the US Department of Justice related to the case, which involved the sale of securities between 2005 and 2007.

Barclays chief executive Jes Staley said the bank was “pleased that we have been able to reach a fair and proportionate settlement”.

Staley added: “It has been a priority for this management team from the start to resolve these historic issues in a timely and appropriate manner wherever possible.

In addition to the find for Barclays, the former head of the senior mortgage security department, Paul Menefee and former senior trader John Carroll, will pay an additional $2 million to settle the lawsuit.

  • Facebook
  • Twitter
  • LinkedIn

I’m LoanSafe.org’s mortgage expert and a senior loan officer with Prime Lending. If you need a live rate quote, or need help getting a new mortgage, please call me direct anytime at 619-379-8999.

Shares
Share This