A lawyer for Nomura Holdings argued on Thursday that a U.S. regulator relied on 'voodoo science' to pursue claims that the bank made false statements in selling $2bn in mortgage-backed securities to Fannie Mae and Freddie Mac.
Reuters reports that David Tulchin, Nomura's lawyer, urged a Manhattan federal judge to reject the Federal Housing Finance Agency's bid to make the bank and Royal Bank of Scotland pay $1.1bn over securities they sold ahead of the 2008 financial crisis.
During closing arguments in the nonjury trial, Tulchin told U.S. District Judge Denise Cote that the FHFA's claimed losses were not the banks' fault and were due to overall market conditions at the time of the crisis.
'Its losses on these seven certificates were caused not by any misstatements but by macroeconomic factors, most importantly the decline in housing prices', he said.
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