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(Reuters) - A federal judge has rejected Wells Fargo & Co's bid to dismiss a U.S. government lawsuit accusing the nation's largest mortgage lender of fraud, a victory for federal investigators pursuing cases tied to the recent housing and financial crises.
U.S. District Judge Jesse Furman in Manhattan said on Tuesday that the government may pursue its key federal claims that Wells Fargo lied about the quality of mortgages it submitted to a government insurance program, costing hundreds of millions of dollars over roughly a decade.
In particular, Furman sided with the U.S. Department of Justice's interpretation of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, a law adopted after the 1980s savings-and-loan crisis that lets the government sue for fraud affecting a federally-insured financial institution.
Wells Fargo said the FIRREA claim should be tossed because the only institution affected by its conduct was itself.
But Furman concluded otherwise, following the lead of two colleagues on the Manhattan federal court, Jed Rakoff and Lewis Kaplan, in cases against Bank of America Corp and Bank of New York Mellon Corp, respectively
Wells Fargo fails to end U.S. mortgage fraud lawsuit | Reuters
U.S. District Judge Jesse Furman in Manhattan said on Tuesday that the government may pursue its key federal claims that Wells Fargo lied about the quality of mortgages it submitted to a government insurance program, costing hundreds of millions of dollars over roughly a decade.
In particular, Furman sided with the U.S. Department of Justice's interpretation of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, a law adopted after the 1980s savings-and-loan crisis that lets the government sue for fraud affecting a federally-insured financial institution.
Wells Fargo said the FIRREA claim should be tossed because the only institution affected by its conduct was itself.
But Furman concluded otherwise, following the lead of two colleagues on the Manhattan federal court, Jed Rakoff and Lewis Kaplan, in cases against Bank of America Corp and Bank of New York Mellon Corp, respectively
Wells Fargo fails to end U.S. mortgage fraud lawsuit | Reuters
