Nomura Holdings to Pay Up to $450 Million in Damages

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Nomura Holdings (NYSE: NMR), a Japanese bank, is liable for selling faulty loan products to U.S. government agencies. A federal judge found the bank liable for the 2009 financial system plunge due to subprime mortgages.

The bank also worked with the Royal Bank of Scotland (LON: RBS), which also underwrote some of the loans provided by Nomura Holdings. Nomura will have to pay up to $450 million as a result. Home loans were provided to Fannie Mae (OTCBb: FNMA) and Freddie Mac (OTCBb: FMCC).

There were 18 banks that were sued for selling subprime loans that led to the subprime mortgage crisis. Many banks, such as JPMorgan Chase (NYSE: JPM), settled out of court with the government to avoid public backlash.

Nomura, based in Tokyo, was adamant that they were not at fault. Instead, the bank stated that the housing market caused the securities to become toxic.

The judge that presided over the case, Judge Denise Cote, reaffirmed that 45 – 59 percent of loans were defective and cited expert testimony as proof for the materially defective loans.

Nomura will appeal the decision and states that they have always been transparent when dealing with Fannie Mae.

An appeal could take years to come to an end. The Royal Bank of Scotland may face future fines as a result of the ruling.

 

Nomura Holdings (NYSE: NMR), a Japanese bank, is liable for selling faulty loan products to U.S. government agencies. A federal judge found the bank liable for the 2009 financial system plunge due to subprime mortgages.

The bank also worked with the Royal Bank of Scotland (LON: RBS), which also underwrote some of the loans provided by Nomura Holdings. Nomura will have to pay up to $450 million as a result. Home loans were provided to Fannie Mae (OTCBb: FNMA) and Freddie Mac (OTCBb: FMCC).

There were 18 banks that were sued for selling subprime loans that led to the subprime mortgage crisis. Many banks, such as JPMorgan Chase (NYSE: JPM), settled out of court with the government to avoid public backlash.

Nomura, based in Tokyo, was adamant that they were not at fault. Instead, the bank stated that the housing market caused the securities to become toxic.

The judge that presided over the case, Judge Denise Cote, reaffirmed that 45 – 59 percent of loans were defective and cited expert testimony as proof for the materially defective loans.

Nomura will appeal the decision and states that they have always been transparent when dealing with Fannie Mae.

An appeal could take years to come to an end. The Royal Bank of Scotland may face future fines as a result of the ruling.

 

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