Newsroom

September 15, 2014

FHFA settles with HSBC for $550M

The Federal Housing Finance Agency has settled with HSBC North American Holdings for $550 million in connection with alleged violations by the company of federal and state securities laws in connection with private-label mortgage-backed securities purchased by Fannie and Freddie before the financial crisis.

The FHFA sued 18 firms, including HSBC, in 2011. According to The Wall Street Journal, HSBC denied claims that it did not fully disclose the risks associated with mortgage bonds sold to government-sponsored enterprises Fannie Mae and Freddie Mac. Under the agreement, HSBC will pay $374 million to Freddie and $176 million to Fannie.

Last month, the agency announced a settlement with Goldman Sachs worth $3.15 billion in connection with allegations the company violated federal and state securities law relating to private-label mortgage-backed securities.

In June, FHFA settled with RBS Securities, Inc., for $99.5 million, and last spring settlements with Barclays Bank PLC and Credit Suisse were reached, for $280 million and $885 million, respectively.