Royal Bank of Scotland to Pay $52 Million for Securitization Role in Subprime Mortgage Meltdown - Attorney General Martha Coakley. BOSTON – RBS Financial Products Inc. (“RBS”) will pay $52 Million to settle allegations that it financed, purchased, and securitized residential loans that were presumptively unfair under Massachusetts law, Attorney General Martha Coakley announced today.
The company, formerly known as Greenwich Capital Financial Products, Inc., is a subsidiary of the Royal Bank of Scotland. This is the third case brought by AG Coakley against investment firms following investigations into their securitization practices. Through today’s action, as well as actions brought against investment giants Morgan Stanley and Goldman Sachs, AG Coakley’s office has recovered more than $200 million in connection with securitization claims. “The securitization of subprime loans by investment banks is a major cause of the economic crisis,” said AG Coakley. The payment will be made pursuant to an “assurance of discontinuance” filed earlier today in Suffolk Superior Court. Royal Bank of Scotland to Pay $52 Million to Settle Massachusetts Claims. Royal Bank of Scotland Group Plc (RBS)’s RBS Financial Products unit will pay $52 million to settle claims it financed, purchased and bundled unfair residential loans, Massachusetts Attorney General Martha Coakley said.
More than $40.2 million will be used for principal reduction and relief for more than 700 borrowers and more than $8.9 million will be paid to the state, Coakley said today in an e-mailed statement. “The securitization of subprime loans by investment banks is a major cause of the economic crisis,” Coakley said. “Investment banks profited handsomely from those securitizations at the expense of homeowners.” The RBS deal, together with previous settlements with Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), brings Massachusetts settlements with investment banks over securitization practices to more than $200 million, according to the statement. The RBS unit was formerly known as Greenwich Capital Financial Products. RBS Braces Itself for Libor Deal. FSA investigation into RBS ‘bad decisions’ a joke, right? December 3rd, 2010 (update 3) THE Financial Services Authority’s obsession with “light touch”, laissez-faire regulation in 1997-2008 did more than anything to transform London into the “Wild West” of finance.
US investment banks dramatically built up their presences in the UK capital in the period: they knew they could rely on the FSA to turn a blind eye to fraud, insider trading, deceptive accounting, over-leverage and other misdemeanours that were unlikely to be tolerated back home. That’s why they called London the “Guantanamo Bay of finance“. Given the UK regulator’s shocking track record — see my earlier articles on Vavasseur/HBOS, Cameron Farley, HBOS Reading and building societies — (in at least three of these cases, there is clear evidence that the FSA colluded with ‘white collar’ criminals to cover up wrongdoing), I wasn’t surprised it has declared its inquiry into the Royal Bank of Scotland “closed”.
Yes. Leading British politicians were no less aghast. Clueless RBS still hasn’t fixed Ulster Bank systems, as executives face trial. By Ed Jacob, via Left Foot Forward It is now over two weeks since the Royal Bank of Scotland was forced to apologise after computer glitches caused many of its customers to be unable to access their accounts or make transactions. While NatWest and RBS customers now seem to be enjoying a near normal service, a cross-party delegation of MPs from Northern Ireland, led by Democratic Unionist Party (DUP) deputy leader Nigel Dodds, met in London yesterday with the RBS chairman Sir Philip Hampton to discuss why customers at its subsidiary, Ulster Bank, continue to face major problems. Indeed, it has been reported that some customers at the Northern Ireland bank may face having to wait until the 16th July before they get fully functioning banking facilities back.
In an industry where sorry has all too often seemed like the hardest word, RBS chief executive Stephen Hester’s apology to Ulster customers may be late, but it’s at least a start. Adding: Here’s hoping! The real estate hustle that’s core to RBS’s survival strategy. October 1st, 2012 (updated from July 6th, 2012) (revised October 8th, 2012) Today, Royal Bank of Scotland chief executive Stephen Hester used a speech at the London School of Economics to call for a new “compact” between banks and society. With his industry engulfed in scandal and widely despised by customers and the general public, Hester said “the current level of negative feeling is, in my view, particularly unhealthy. We need to reach a new compact with society where banks are better at balancing the interests of everyone who depends upon them.”
We certainly do. But if this is Hester’s goal, he has a decidedly odd way of going about it. Under his leadership RBS has been shifting billions of pounds of commercial property assets from its banking book into its commercial property division, West Register. The practicalities of the strategy are distasteful, though. And, yes, some of the activity borders on the criminal. I understand that Tayside Police and the Crown Office. Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland | Matt Taibbi.