RBS Settles Illinois MBS Probe for $20 Million
The Royal Bank of Scotland is paying $ 20 million to settle an investigation by the Illinois attorney general related to the bank’s marketing and sale of residential mortgage- backed securities.
The investigation had focused on the Royal Bank of Scotland’s alleged failure to disclose the securities true risks during the period leading up to the 2008 economic collapse.
“With this settlement, I have recovered over $ 475 million for Illinois pension systems and residents as a result of fraudulent conduct in the mortgagebacked securities market,” Lisa Madigan, the Illinois attorney general, said in a press release. “Nearly a decade after the economic crisis, I continue to recover critical funds for the state due to Wall Street’s misconduct.”
RBS recently agreed to pay almost $5 billion to resolve similar federal allegations. In the past year, RBS has agreed to pay more than $ 6 billion to resolve various charges related to the sale and marketing of its precrisis RMBS.
Illinois will divide the proceeds from its settlement with RBS between Illinois’ Teachers Retirement System, the State Universities Retirement System, and the Board of Investment that oversees the State Employees’ Retirement System.
Other financial services firms Madigan has settled precrisis RMBS allegations with include Bank of America, which agreed to pay $ 300 million. BofA distributed $ 200 million of that amount to Illinois pension systems and $ 100 million for consumer relief. NMN