Two major Wall Street banks have agreed to pay more than $400 million to settle cases brought by the U.S. Securities and Exchange Commission in connection with residential mortgage-backed securities.
JPMorgan Chase & Co. agreed to pay $297 million while Credit Suisse agreed to pay $120 million to settle the SEC's claims, which the agency announced Friday.
The SEC's cases stem from allegations that the banks misled investors. The SEC claims JPMorgan misstated the delinquency status of the underlying residential mortgages bundled into its residential mortgage-backed securities (RMBS) bonds.
“In many ways, mortgage products such as RMBS were ground zero in the financial crisis,” Robert Khuzami, director of the SEC’s Division of Enforcement, said in a statement. “Misrepresentations in connection with the creation and sale of mortgage securities contributed greatly to the tremendous losses suffered by investors once the U.S. housing market collapsed."