Societe Generale agreed to pay a $50 million civil fine and admit to misconduct to settle U.S. claims that it fraudulently concealed from investors the poor quality of residential mortgage-backed securities it marketed and sold, Reuters reported on Friday. The U.S. Department of Justice said on Friday that the French bank concealed problems in a $780 million debt issue it arranged in 2006, and which has since left investors with "significant losses" that may grow further. The debt issue, SG Mortgage Securities Trust 2006-OPT2, was backed by subprime loans from Option One Mortgage Corp, then a unit of tax preparer H&R Block Inc. Societe Generale admitted to concealing how many of the loans were not underwritten properly and should not have been securitized, and that no borrowers owed more on their loans than their homes were worth.
