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HSBC settles mortgage case with US regulators for $550m | HSBC settles mortgage case with US regulators for $550m |
(35 minutes later) | |
The British bank HSBC will pay $550m (£338m) to US regulators to settle claims that it mis-sold mortgage-related bonds between 2005 - 2007 to US mortgage giants Fannie Mae and Freddie Mac. | |
It is the 16th bank to reach an agreement with the Federal Housing Finance Agency (FHFA) over the issue. | It is the 16th bank to reach an agreement with the Federal Housing Finance Agency (FHFA) over the issue. |
Royal Bank of Scotland and Nomura have yet to settle their cases. | Royal Bank of Scotland and Nomura have yet to settle their cases. |
HSBC said it was "pleased to resolve the matter". | HSBC said it was "pleased to resolve the matter". |
The lawsuit had accused HSBC of making $6.2bn of mortgage-backed securities look like they met regulatory guidelines and standards, when they did not. HSBC has previously denied the allegations. | The lawsuit had accused HSBC of making $6.2bn of mortgage-backed securities look like they met regulatory guidelines and standards, when they did not. HSBC has previously denied the allegations. |
The FHFA, which oversees Fannie Mae and Freddie Mac, has now recouped $17.9bn from settlements with banks. | The FHFA, which oversees Fannie Mae and Freddie Mac, has now recouped $17.9bn from settlements with banks. |
HSBC's fine is significantly less than that of US banking giant Bank of America, which reached a $9.5bn settlement with the FHFA last March. | |
Fannie Mae and Freddie Mac lost more than $30bn in the financial crisis, partly because of their investments in the subprime mortgages, and were bailed out by the US government. | Fannie Mae and Freddie Mac lost more than $30bn in the financial crisis, partly because of their investments in the subprime mortgages, and were bailed out by the US government. |
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