Nomura Loses RMBS Lawsuit in U.S.

June 26, 2018

Tokyo- Japanese brokerage giant Nomura Holdings Inc. has lost a lawsuit over sales of residential mortgage-backed securities in the United States.

Nomura said on Monday that the U.S. Supreme Court the same day rejected an appeal filed by U.S. units of the company over the case.

With the top court ruling, a decision by a U.S. district court, issued in May 2015, became final.

The district court ordered the Nomura units and others, including a subsidiary of the Royal Bank of Scotland, to pay 806 million dollars to two U.S. government-affiliated institutions--the Federal National Mortgage Association, better known as Fannie Mae, and Federal Home Loan Mortgage Corp., or Freddie Mac.

Fannie Mae and Freddie Mac were ordered to return RMBS they bought to the Nomura side.

In September 2011, the Federal Housing Finance Agency, which supervises Fannie Mae and Freddie Mac, sued the Nomura subsidiaries and other parties for allegedly selling the RMBS without giving sufficient explanations.

Nomura appealed against the district court ruling in June 2015.

An appeals court issued in September 2017 a ruling upholding the district court decision, and the Nomura side filed an appeal with the Supreme Court in March this year.

Nomura said in a statement that the impact of the Supreme Court decision on its consolidated earnings is expected to be "insignificant" as the firm "has already recorded the amount of reasonably possible loss as a loss contingency." Jiji Press