CHICAGO — The state of Illinois has reached a $20 million settlement with Royal Bank of Scotland for the bank's alleged failure to fully disclose the risks of its mortgage-backed securities (RMBS) relating to the state's pension fund investments.
According to Illinois Attorney General Lisa Madigan, the settlement funds will be distributed among the Teachers Retirement System of the state of Illinois, the State Universities Retirement System of Illinois and the Illinois State Board of Investment.
“With this settlement, I have recovered over $475 million for Illinois pension systems and residents as a result of fraudulent conduct in the mortgage-backed securities market,” Madigan said in a statement. "Nearly a decade after the economic crisis, I continue to recover critical funds for the state due to Wall Street’s misconduct.”
According to the Attorney General's Office, the settlement with Royal Bank of Scotland marks the eighth agreement relating to the sale of mortgaged-backed securities. Other settlements include JP Morgan Chase & Company for $100 million, Citigroup for $44 million plus $40 million in consumer relief, Bank of America for $300 million, Morgan Stanley for $22.5 million and Goldman Sachs for $25 million.