British bank HSBC has agreed to pay $550 million to resolve U
ritish bank HSBC has agreed to pay $550 million to resolve U.S. claims that it misled U.S. mortgage giants Fannie Mae and Freddie Mac about risky mortgage securities it sold them before the housing market collapsed in 2007.
The Federal Housing Finance Agency, which oversees Fannie and Freddie, announced the settlement Friday with HSBC. London-based HSBC is Europe's largest bank and also has extensive operations in the U.S. Its U.S. division has about $289 billion in assets, making it the 9th largest bank in the U.S.
HSBC sold the securities to the two mortgage companies between 2005 and 2007. Under the settlement, HSBC is paying $176 million to Fannie and $374 million to Freddie.
"We are pleased to have resolved this matter," Stuart Alderoty, HSBC North America's senior executive vice president and general counsel, said in a statement.
The settlement is the latest federal government agreement over actions related to the financial crisis that struck in 2008. The meltdown, triggered by vast sales of high-risk mortgage securities, plunged the economy into the deepest recession since the Great Depression.
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