{"id":39006,"date":"2013-11-08T03:57:56","date_gmt":"2013-11-08T08:57:56","guid":{"rendered":"http:\/\/www.hedgeco.net\/news\/?p=39006"},"modified":"2013-11-08T03:59:20","modified_gmt":"2013-11-08T08:59:20","slug":"sec-charges-rbs-subsidiary-with-misleading-investors","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/11\/2013\/sec-charges-rbs-subsidiary-with-misleading-investors.html","title":{"rendered":"SEC Charges RBS Subsidiary with Misleading Investors"},"content":{"rendered":"

\"CITY-RBS-12323-1686074\"<\/a>New York (HedgeCo.net) – RBS Securities Inc., is under fire by the SEC for misleading investors in a 2007 subprime residential mortgage-backed security (RMBS) offering.\u00a0 RBS agreed to settle the matter and pay more than $150 million, which the SEC will use to compensate investors for harm suffered as a result of RBS\u2019s conduct.<\/p>\n

The SEC alleges that RBS said the loans backing the offering \u201cgenerally\u201d met the lender\u2019s underwriting guidelines even though nearly 30 percent fell so short of the guidelines that RBS should have excluded them from the offering entirely.\u00a0 Stamford, Connecticut-based RBS, then known as Greenwich Capital Markets, quickly reviewed a very small portion of the loans and was paid approximately $4.4 million for its work as the lead underwriter on the transaction, the SEC said in a complaint filed in federal court in Connecticut.<\/p>\n

\u201cIn its rush to meet a deadline set by the seller of these loans, RBS cut corners and failed to complete adequate due diligence, with predictable results,\u201d said George S. Canellos, co-director of the SEC\u2019s Division of Enforcement.\u00a0\u201cToday\u2019s action punishes that misconduct and secures more than $150 million in relief for those harmed by this shoddy securitization.\u201d<\/p>\n

RBS told investors the loans backing the offering were \u201cgenerally in accordance with\u201d the lender\u2019s underwriting guidelines, which consider the value of the home relative to the mortgage and the borrower\u2019s ability to repay the loan.\u00a0 RBS knew or should have known that was false because due diligence before the offering showed that almost 30% of the loans underlying the offering did not meet the underwriting guidelines. \u00a0In its complaint, the SEC said RBS gave investors a misleading impression of the quality of the loans backing the offering and the likelihood of their repayment.<\/p>\n

RBS, without admitting or denying the SEC\u2019s allegations, has agreed to a final judgment that orders it to disgorge $80.3 million, plus prejudgment interest of $25.2 million, and pay a civil penalty of $48.2 million.<\/p>\n

Alex Akesson
\nEditor for\u00a0HedgeCo.net<\/a>
\nalex@hedgeco.net<\/a>
\nHedgeCo.Net<\/a>\u00a0is a premier\u00a0hedge fund database<\/a>\u00a0and community for qualified and accredited investors only. Membership in\u00a0HedgeCo.net<\/a>\u00a0is FREE and EASY. We also offer FREE LISTINGS for\u00a0Hedge Funds<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"

New York (HedgeCo.net) – RBS Securities Inc., is under fire by the SEC for misleading investors in a 2007 subprime residential mortgage-backed security (RMBS) offering.\u00a0 RBS agreed to settle the matter and pay more than $150 million, which the SEC […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,12,3],"tags":[],"class_list":["post-39006","post","type-post","status-publish","format-standard","hentry","category-hedge-fund-fraud","category-hedge-fund-regulation","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=39006"}],"version-history":[{"count":3,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39006\/revisions"}],"predecessor-version":[{"id":39010,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/39006\/revisions\/39010"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=39006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=39006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=39006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}