BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Banks settle Fannie Mae, Freddie Mac bond rigging litigation


(Reuters) — Thirteen prominent banks and financial services companies agreed to pay $337 million to resolve claims by investors that they conspired to rig prices of bonds issued by mortgage companies Fannie Mae and Freddie Mac for a decade.

The preliminary settlements filed late Monday night in federal court in Manhattan require a judge's approval, and would conclude private nationwide antitrust litigation brought against 16 defendants, with settlements totaling $386.5 million.

Barclays PLC, which underwrote the most Fannie Mae and Freddie Mac bonds, will pay $87 million.

Bank of America Corp., BNP Paribas SA, Cantor Fitzgerald, Citigroup Inc., Credit Suisse Group AG, HSBC, JPMorgan Chase & Co., Morgan Stanley, Nomura Holdings Inc., Societe Generale SA, Toronto-Dominion and UBS Group AG will separately pay a combined $250 million.

The banks denied wrongdoing in agreeing to settle. Deutsche Bank AG, Goldman Sachs Group Inc. and units of Tennessee's First Horizon Bank previously settled for a combined $49.5 million.

Investors including Pennsylvania Treasurer Joe Torsella had accused the defendants of exploiting their market dominance to overcharge for Fannie Mae and Freddie Mac bonds from Jan. 1, 2009, to Jan. 1, 2019, and keep more profit for themselves.

The civil case began after a published report said the U.S. Department of Justice had opened a criminal price-fixing probe related to the bonds.

According to an amended complaint, the 16 defendants underwrote $3.97 trillion, or 77.2%, of Fannie Mae and Freddie Mac bonds from Jan. 1, 2009, to Jan. 1, 2016.

A spokeswoman for Barclays declined to comment on Tuesday. Lawyers for the investors did not immediately respond to requests for comment.

The Manhattan court is home to an array of private litigation accusing banks of conspiring to move various bond, commodity and currency markets.

Fannie Mae and Freddie Mac guarantee more than half of U.S. mortgages.

The so-called government-sponsored enterprises, or GSEs, have been in conservatorships established by the Federal Housing Finance Agency since taxpayers bailed them out in September 2008, with profits swept to the U.S. Treasury.

On Sept. 5, the White House announced a plan to return Fannie Mae and Freddie Mac to the private sector. FHFA Director Mark Calabria has said he hopes to complete the process by 2024.

The case is In re: GSE Bonds Antitrust Litigation, U.S. District Court, Southern District of New York.






Read Next

  • Bank of America to settle with Fannie Mae, sell mortgage assets

    (Reuters) — Bank of America on Monday announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans, in a series of deals meant to help the bank move past its disastrous 2008 purchase of Countrywide Financial Corp.