By Nate Raymond and Jonathan Stempel
NEW YORK Feb 27 Societe Generale has
agreed to pay $122 million to settle a lawsuit by a U.S.
regulator accusing the bank of misleading Fannie Mae and Freddie
Mac in the purchase of mortgage-backed securities.
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
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
The settlement is "already substantially reflected in an
existing specific reserve for this matter," Societe Generale
said in a statement. The bank on Feb. 12 said it had set aside
about 700 million euros (US$960 million) at year-end for
"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
The case is Federal Housing Finance Agency v. SG Americas,
Inc. et al, U.S. District Court, Southern District of New York,