Compliance Corner - Nomura, RBS, Others

Editorial Staff

27 June 2018

Nomura, RBS
The US Supreme Court has declined to hear an appeal brought by Nomura Holdings and the Royal Bank of Scotland Group seeking to overturn an order requiring them to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae and Freddie Mac, media reports have said.

According to Reuters, the court left in place a ruling that went against the banks, which had challenged the 2015 award on multiple grounds.

The award in 2015 stemmed from a lawsuit brought against Nomura and RBS by the Federal Housing Finance Agency in 2011. The FHFA has acted on behalf of mortgage agencies Fannie Mae and Freddie Mac since their 2008 takeover by the federal government after the collapse of the US housing market.

The lawsuit was one of 18 brought by the FHFA for over $200 billion in mortgage-backed securities that banks sold Fannie Mae and Freddie Mac.

All the other lawsuits have been settled.

The FHFA has recovered more than $23 billion from the settlements, including $5.5 billion from RBS in a different lawsuit, $5.83 billion from Bank of America Corporation and $4 billion from JPMorgan Chase & Co.

Nomura said in a statement: "Although disappointed with the decision, Nomura respects the legal process and will satisfy its obligations in this case.”

This publication has contacted RBS for a comment, and will update in due course.

1832 Asset Management
A proposed class action lawsuit has been filed against Scotiabank's 1832 Asset Management regarding trailing commissions paid to discount brokers on Scotia and Dynamic mutual funds, media reports have said.

According to Canadian newswire, Times Colonist, Law firms Siskinds and Bates Barristers have alleged investors who hold the funds in discount brokerages receive no value for the trailing commissions paid.

The allegations have not been proven in court.

Scotiabank's 1832 is the trustee and manager of Scotia and Dynamic mutual funds. The firm declined to comment on the matter, as it is still before the courts.