Nomura Found Liable in US Mortgage Suit

A U.S. District Court judge ruled on Monday that two banks misled Fannie Mae and Freddie Mac and knowingly sold them toxic mortgage bonds. Judge Denise Cote ruled that the Japan-based Nomura Holdings and the Royal Bank of Scotland did not accurately describe the quality of mortgage-backed securities sold to Fannie and Freddie, which led to the 2008 financial crisis. The Federal Housing Finance Agency, which brought on the lawsuit, will propose damages to be paid by the two banks. Nomura and RBS were two of 18 financial institutions targeted by the FHFA, but were the first two to take their case to trial.