Societe Generale SA will pay $122 million to settle a 2011
lawsuit filed by a federal regulator over allegedly misleading
disclosures for mortgage investments sold to Fannie Mae and Freddie
Mac in 2006.
The regulator, the Federal Housing Finance Agency, announced the
settlement on Thursday. It had sought unspecified damages on some
$1.3 billion in securities purchased by Fannie and Freddie, which
were taken over by the U.S. government in 2008.
The French bank didn't admit to any liability or wrongdoing in
the settlement. The settlement amount "is already substantially
reflected in an existing specific reserve for this matter," said
spokesman Jim Galvin. "The settlement will have no material impact
on the group's earnings."
The FHFA filed lawsuits in 2011 against 18 banks that sold more
than $200 billion in bonds to Fannie and Freddie, alleging the risk
characteristics of the mortgages underlying those investments were
misrepresented.
The FHFA has now settled eight of those lawsuits. It reached a
ninth settlement with Wells Fargo & Co., which it never sued.
It has collected $9.3 billion for Fannie and Freddie in those nine
settlements.
"The FHFA remains committed to satisfactory resolution of the
remaining actions," the agency said in a statement.
Write to Nick Timiraos at nick.timiraos@wsj.com
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