The Royal Bank of Scotland will pay $120 million to settle claims brought by the state of Connecticut, which accused RBS of misrepresenting the quality of mortgages backing residential mortgage-backed securities during the run-up to the financial crisis.
According to an announcement from Connecticut Attorney General George Jepsen and state Department of Banking Commissioner Jorge Pérez, RBS served as the lead underwriter for approximately 250 RMBS deals valued at $250 billion from January 2005 to December 2008.
As lead underwriter, RBS was required to conduct due diligence on the pools of loans that backed its RMBS deals. The due diligence is conducted to provide assurances to the public and potential investors that representations about the securities are accurate and complete.
Per the announcement from Jepsen and Pérez, Connecticut accused RBS...