RBS Securities to pay largest settelement in state history
HARTFORD — Connecticut officials say RBS Securities Inc. will pay the state $120 million to end an investigation of its underwriting of mortgage-backed securities before the financial crisis in 2008.
State Attorney General George Jepsen and Department of Banking Commissioner Jorge Perez said the settlement announced Monday is the largest in state history.
Stamford-based RBS Securities, owned by the Royal Bank of Scotland, underwrote about 250 deals involving residential mortgage-backed securities valued at $250 billion from 2005 to 2008.
Jepsen said RBS Securities failed to determine, and misstated, the quality of mortgage loans used in the securities, resulting in losses of $40 billion. He called the company a key player in the mortgage-back security industry that helped crash the economy.
RBS said in a statement that resolving such issues remains a priority.