Credit Suisse Group agreed to pay $885 million to resolve claims by a U.S. regulator that the Swiss bank misled Fannie Mae and Freddie Mac into buying mortgage-backed securities that later went sour.
The settlement announced Friday would resolve claims in two lawsuits filed in New York by the Federal Housing Finance Agency, the conservator since 2008 for the government-controlled mortgage companies.
It is the ninth settlement that the FHFA has reached in litigation that began in 2011, when it filed 18 lawsuits over some $200 billion in mortgage-backed securities, an investment product that was at the center of the global financial crisis.
The accord resolves claims against Credit Suisse over $16.6 billion of securities sold to Fannie and Freddie.
The FHFA has recovered more than $10.1 billion from banks over similar securities.
In a move that could weaken Facebook’s argument in a California district court suit over teen privacy, the Federal Trade Commission says the social network is misinterpreting a key children’s privacy law.
The FTC filed a brief Thursday night to weigh in on a key point in the case Batman v. Facebook, also known as Fraley v. Facebook. The agency said that Facebook is wrong in contending that, because the Children’s Online Privacy and Protection Act only protects the privacy of children under 12, the law could be interpreted to keep states from enforcing their own laws on teen privacy.
This was a main part of Facebook’s argument against those who objected to a 2012 settlement over “Sponsored Stories,” which featured users’ “likes” and check-ins in advertisement. The users say the $10 million settlement does not require teens to get explicit permission from their parents before agreeing to show up in advertisements, in violation of state teen privacy laws in seven states, including Virginia.
— Hayley Tsukayama
● A federal judge in Manhattan gave final approval to JPMorgan Chase’s $218 million settlement to resolve class-action litigation accusing the largest U.S. bank of playing a central role in the huge Ponzi scheme of former client Bernard Madoff. The settlement was part of a $2.24 billion global resolution of Madoff-related matters by JPMorgan, which was Madoff’s main bank for more than 20 years.
● The “Every Day Low Price” king is trying to shake up the world of pricing again. Wal-Mart said it has rolled out an online tool that allows shoppers to compare its prices on 80,000 food and household products with those of its competitors. The world’s largest retailer began offering the feature, called “Savings Catcher,” on its Web site late last month in seven big markets, including Dallas, San Diego and Atlanta.
● Wendy’s is rolling out a program that lets customers pay using their smartphones, following a similar plan unveiled this week by Burger King. Wendy’s, based in Dublin, Ohio, has been testing the mobile payment option over the past year and said the majority of its roughly 5,800 U.S. locations are ready to accept the payments.
● The families of three teenagers killed or injured in a 2006 Wisconsin car crash are suing General Motors, alleging that the company was negligent in designing its small cars and committed fraud by not disclosing facts about defects. Natasha Weigel, 18, and Amy Rademaker, 15, died after an October 2006 crash involving a 2005 Chevrolet Cobalt compact car with a faulty ignition switch. The car’s driver, Megan Phillips, suffered permanent brain damage, according to a statement from the families’ law firm.
— From news services