Societe Generale to Pay $122 Million to Fannie, Freddie

Societe Generale SA will pay $122 million to settle a 2011 lawsuit filed by a federal regulator over allegedly misleading disclosures for mortgage investments sold to Fannie Mae and Freddie Mac in 2006.

The regulator, the Federal Housing Finance Agency, announced the settlement on Thursday. It had sought unspecified damages on some $1.3 billion in securities purchased by Fannie and Freddie, which were taken over by the U.S. government in 2008.

The French bank didn't admit to any liability or wrongdoing in the settlement. The settlement amount "is already substantially reflected in an existing specific reserve for this matter," said spokesman Jim Galvin. "The settlement will have no material impact on the group's earnings."

The FHFA filed lawsuits in 2011 against 18 banks that sold more than $200 billion in bonds to Fannie and Freddie, alleging the risk characteristics of the mortgages underlying those investments were misrepresented.

The FHFA has now settled eight of those lawsuits. It reached a ninth settlement with Wells Fargo & Co., which it never sued. It has collected $9.3 billion for Fannie and Freddie in those nine settlements.

"The FHFA remains committed to satisfactory resolution of the remaining actions," the agency said in a statement.

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