STAMFORD, Conn. (CBS Connecticut) – A securities firm whose actions Connecticut Attorney General George Jepsen claims were a major player in the mortgage meltdown nearly a decade ago, has agreed to a settlement.
Jepsen said RBS Securities of Stamford will pay the state $120 million. According to the Attorney General, the company did not do it’s due diligence in recognizing the quality of mortgage loans, and sub-prime loans backed securities that, when the housing bubble burst, left many homeowners in the lurch when housing prices fell.
“[Research] entailed examining, piece by piece, the different securities which were marketed by RBS, which they claimed, with their alleged due diligence, contained safe mortgages and mortgages that were not likely to get put under.”
The vast majority of the settlement money is headed to the general fund, with $250,000 to be used for financial education by the banking department, according to Jepsen.