A global securities firm has agreed to pay nearly $50 million for fraudulently trading in mortgage-backed securities, and other financial instruments
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RBS Securities Inc. has agreed to pay $44 million for fraudulently trading in mortgage-backed securities, and other financial instruments.
“For years, RBS fostered a culture of securities fraud,” said U.S. Attorney Daly. “Those in a position of authority taught and encouraged fraudulent trading practices. Worse, those supervisors and compliance personnel then took steps to prevent victims and honest RBS employees from discovering and exposing the scheme. After our joint investigation into fixed income trading began, RBS saw the error of its ways. RBS was able to avoid criminal charges in this case only because of its voluntary self-reporting and extraordinary cooperative efforts. By entering into this agreement, RBS has admitted the seriousness of its past criminal conduct and made a clean break. This is another step in our continuing joint effort to make clear to broker-dealers that lying to customers to increase profits is a crime and that only by rooting out and reporting such misconduct on their own trading floors can they avoid significant criminal liability. We thank SIGTARP and Connecticut FBI for their excellent work on this important case.”
According to the Department of Justice and the Special Inspector General for the Troubled Asset Relief Program, an investigation determined RBS had defrauded customers in trades of residential mortgage-backed securities between 2008 and 2013.
The purpose of the fraud, according to SIGTARP, was to increase profits on trades at the expense of customers.
“It is incredibly troubling that RBS supervisors participated in and encouraged lower level employees to commit securities fraud, then took steps to prevent honest employees from reporting their concerns,” said FBI Special Agent in Charge Ferrick. “Had RBS not decided to self-report and cooperate, it would have faced much harsher consequences for its egregious criminal conduct. The U.S. Attorney’s Office, SIGTARP and the FBI have forged a formidable partnership in our investigation into fraud in the RMBS and related markets.”
RBS will pay a monetary penalty of $35 million and pay more than $9 million of restitution to victim customers, SIGTARP said in a release.
“For years, RBS fostered a culture of securities fraud,” said U.S. Attorney Daly. “Those in a position of authority taught and encouraged fraudulent trading practices. Worse, those supervisors and compliance personnel then took steps to prevent victims and honest RBS employees from discovering and exposing the scheme. After our joint investigation into fixed income trading began, RBS saw the error of its ways. RBS was able to avoid criminal charges in this case only because of its voluntary self-reporting and extraordinary cooperative efforts. By entering into this agreement, RBS has admitted the seriousness of its past criminal conduct and made a clean break. This is another step in our continuing joint effort to make clear to broker-dealers that lying to customers to increase profits is a crime and that only by rooting out and reporting such misconduct on their own trading floors can they avoid significant criminal liability. We thank SIGTARP and Connecticut FBI for their excellent work on this important case.”
According to the Department of Justice and the Special Inspector General for the Troubled Asset Relief Program, an investigation determined RBS had defrauded customers in trades of residential mortgage-backed securities between 2008 and 2013.
The purpose of the fraud, according to SIGTARP, was to increase profits on trades at the expense of customers.
“It is incredibly troubling that RBS supervisors participated in and encouraged lower level employees to commit securities fraud, then took steps to prevent honest employees from reporting their concerns,” said FBI Special Agent in Charge Ferrick. “Had RBS not decided to self-report and cooperate, it would have faced much harsher consequences for its egregious criminal conduct. The U.S. Attorney’s Office, SIGTARP and the FBI have forged a formidable partnership in our investigation into fraud in the RMBS and related markets.”
RBS will pay a monetary penalty of $35 million and pay more than $9 million of restitution to victim customers, SIGTARP said in a release.
