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 The settlement, announced by the Federal Housing Finance Agency (FHFA)
on Thursday, marked the eighth to date by the FHFA, which in 2011
filed 18 lawsuits over some $200 billion in mortgage-backed
securities that were at the heart of the 2008 financial crisis.
The deal, which resolves a case over $1.3 billion in securities, was
the latest reminder of the continuing mortgage liabilities facing
banks.
Some the largest headaches have been the cases by the FHFA, which
has acted as conservator for Fannie and Freddie since their
government takeover in 2008.
The deal with Paris-based Societe Generale follows Morgan Stanley's
agreement earlier this month to pay $1.25 billion to resolve a
similar case by the FHFA.
The agency has overall has recovered $8.91 billion in settlements in
the litigation with deals being cut with banks including JPMorgan
Chase & Co, Deutsche Bank AG and Citigroup Inc, among others.
The FHFA reached a separate $335.2 million settlement with Wells
Fargo & Co over mortgage securities without filing a lawsuit.
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The settlement is "already substantially reflected in an existing
specific reserve for this matter," Societe Generale said in a
statement. The bank on February 12 said it had set aside about 700
million euros (US$960 million) at year-end for litigation.
"The settlement will have no material impact on the group's
earnings," Societe Generale said Thursday.
Litigation remains pending against several other banks, including
Bank of America Corp, Credit Suisse Group AG and Royal Bank of
Scotland Group Plc. Bank of America's Merrill Lynch is scheduled to
go to trial first on June 2.
The case is Federal Housing Finance Agency v. SG Americas, Inc. et
al, U.S. District Court, Southern District of New York, No.
11-06203.
(Reporting by Nate Raymond in New York;
Editing by Nick Zieminski)
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