By Clarissa Sosin
An Asia-based financial services group agreed to pay $480 million for contributing to the 2008 financial housing crisis, Brooklyn federal prosecutors announced on Tuesday.
Nomura Holding America Inc. agreed to the multi-million dollar settlement in civil penalties that will resolve federal civil claims that between 2006 and 2007, the company mislead investors about mortgage-backed securities.
“This settlement holds Nomura accountable for its fraudulent conduct in connection with
its Residential Mortgage-Backed Securities offerings, which caused substantial harm to investors and contributed to the financial crisis of 2008,” said United States Attorney Richard P. Donoghue in a press release.
University endowments, retirement funds and federally insured financial institutions were among the types of investors suffered losses because of Nomura’s misconduct.
“The actions of Nomura resulted in significant losses to investors, including Fannie Mae
and Freddie Mac, which purchased Nomura Residential Mortgage-Backed Securities backed by
defective loans,” said FHFA-OIG Associate Inspector General Byrne in the press release.
The 2008 financial crisis witnessed the dissolution of Lehman Brothers. The Brothers were a staple in the world of big finance, brought the global economy to the brink of collapse, and introduced the notion of “too big to fail” into the regulation of major banks and financial institutions.
Nomura Holding America Inc. said in a statement that the settlement does not mean that they have admitted to any wrongdoing by their American subsidiaries and that they continue to dispute the civil claims.
“The Company and the U.S. Subsidiaries consider it to be in their best interests to conclude this matter and avoid protracted and expensive litigation concerning transactions and practices that occurred ten or more years ago,” Nomura’s press release said.
Nomura is expects to report about a loss in the second quarter because of the settlement, the press release said.