Nomura to defend US mortgage allegations

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Nomura will defend claims by a U.S. regulator that it sold defective mortgage-backed securities to Fannie Mae and Freddie Mac before the 2008 financial crisis, becoming the first bank to take such a case to trial.

Bloomberg News reports that the Federal Housing Finance Agency, suing on behalf of the two government-owned companies, claims Nomura sold them $2bn of bonds backed by faulty mortgages.

The agency seeks more than $1bn in damages in the trial, which is set to start Monday in Manhattan federal court.

Nomura is choosing to fight claims that 16 other banks settled after the blow-up of toxic mortgage bonds led to the global credit crunch. FHFA has reached $17.9bn in settlements from banks including Bank of America, JPMorgan and Goldman Sachs. If Nomura prevails at trial, it may embolden other firms facing mortgage-related suits to defend themselves rather than settle.

To access the complete Bloomberg News article hit the link below:

Nomura First to Fight U.S. Toxic Debt Claims at Trial

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