Nomura Holdings and the Royal Bank of Scotland’s trial with the Federal Housing Finance Agency is the first out of 18 lawsuits to reach trial, and now that all sides have presented their closing arguments, it’s in the hands of U.S. District Judge Denise Cote to decide what to do.

The FHFA is suing various big financial firms for the alleged misselling of toxic mortgages to Fannie Mae and Freddie Mac during the housing boom. The FHFA says the mortgages defaulted in large numbers, requiring default on the Fannie and Freddie bonds and led the bailout and conservatorship of the government-sponsored entities.

Per Reuters:

The FHFA previously obtained nearly $17.9 billion in settlements with banks including Bank of America Corp, JPMorgan Chase & Co and Deutsche Bank AG. Those deals followed a series of adverse rulings by Cote.

For this lawsuit:

A lawyer for Nomura Holdings Inc argued on Thursday that a U.S. regulator relied on "voodoo science" to pursue claims that the bank made false statements in selling $2 billion in mortgage-backed securities to Fannie Mae and Freddie Mac.

David Tulchin, Nomura's lawyer, urged a Manhattan federal judge to reject the Federal Housing Finance Agency's bid to make the Tokyo-based bank and Royal Bank of Scotland Group pay $1.1 billion over securities they sold ahead of the 2008 financial crisis.

Tulchin argued that the FHFA had introduced little testimony to back up its claims, instead relying on paid expert witnesses using "voodoo science" and questionable methodologies to analyze the securities.

Most Popular Articles

Fannie Mae, Freddie Mac watchdog prepping for "massive IPO"

The watchdog for Fannie Mae and Freddie Mac is interviewing Wall Street firms to handle a public offering that would dwarf any IPO in history, Fox says.

Dec 09, 2019 By

Latest Articles

Here are the cities where iBuyers are taking hold

With companies like Opendoor, Zillow and Redfin, homebuyers and sellers were no longer limited to the traditional method when they decided to buy and sell their homes. But just how much of an impact are those iBuyers having on the market itself?

Dec 11, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please