Virginia recovers more than $63 million in settlement
- January 22, 2016
Virginia is recovering $63 million in a settlement with 11 banks to settle allegations they misled the commonwealth and the Virginia Retirement System about the quality of mortgage-backed securities sold to VRS, according to Attorney General Mark Herring.
Herring said this represented the largest recovery from a suit not related to health care under the Virginia Fraud Against Taxpayers Act.
"This case breaks new ground for Virginia, recovering millions for Virginia taxpayers from banks that we alleged had misrepresented the products they sold to the Commonwealth,” Herring said in a statement.
Under the agreement, the banks have admitted no liability, and Virginia has dismissed claims against the defendants in exchange for the following settlements:
Countrywide Securities Corp. and Merrill Lynch, Pierce, Fenner & Smith Inc. (combined): $19.5 million
RBS Securities Inc.: $10 million
Barclays Capital Inc.: $9 million
Morgan Stanley & Co. LLC: $6.9 million
Deutsche Bank Securities Inc.: $5.6 million
Citigroup Global Markets Inc.: $4.8 million
Goldman, Sachs & Co.: $2.9 million
HSBC Securities (USA) Inc.: $2.5 million
Credit Suisse Securities (USA) LLC: $1.2 million
UBS Securities LLC: $850,000
The case was initially filed in Richmond City Circuit Court by Integra REC LLC on behalf of Virginia. Herring intervened and brought the case on behalf of Virginia and the VRS.The commonwealth sought to recover $383 million in alleged damages, including $250.66 million of realized losses.