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Maryland Attorney General Secures $18 Million Settlement from RMBS Underwriter

  • Maryland AG Brian Frosh reached a settlement with a subsidiary of the Royal Bank of Scotland, RBS Financial Products, Inc. (“RBSFP”), to resolve allegations that it misled investors in its packaging and underwriting of residential mortgage-backed securities (“RMBS”) in violation of the Maryland Securities Act.
  • According to the consent order, RBSFP made misrepresentations about its RMBS, including making misleading or untrue statements about the quality of the loans backing its RMBS and its offering documents also failed to disclose agreements with mortgage originators limiting its due diligence of the loans and failed to disclose the findings of the due diligence reports.
  • Under the terms of the consent order, RBSFP will pay approximately $18 million to the state and the funds will be used for restitution to certain investors and for enforcement costs, with any remaining funds credited to the Mortgage Loan Servicing Practices Settlement Fund.