(Reuters) - General Electric Co will pay a $1.5 billion civil fine to resolve a long-running U.S. probe into defective subprime mortgages from its former WMC Mortgage unit prior to the 2008 global financial crisis.

FILE PHOTO: The logo of U.S. conglomerate General Electric is pictured at the company's site of its energy branch in Belfort, France, February 5, 2019. REUTERS/Vincent Kessler/File Photo

The U.S. Department of Justice on Friday said the accord resolves claims that GE concealed the poor quality of the loans and WMC’s lax fraud controls when packaging the loans into residential mortgage-backed securities sold to investors.

GE did not admit any wrongdoing in the settlement.

WMC was acquired by GE’s finance unit, General Electric Capital Corp, in 2004, and originated more than $65 billion of mortgage loans in the next three years.

The Justice Department said WMC overstated the quality of a majority of loans it packaged into residential mortgage-backed securities, and its fraudulent practices resulted in billions of dollars of investor losses.

Boston-based GE in January had announced an agreement in principle for the settlement and already set aside $1.5 billion. GE sold WMC in late 2007.

“This is another step in our ongoing efforts to de-risk GE Capital,” GE said in a statement. “This agreement represents a significant part of the total legacy exposure associated with WMC and we are pleased to put this matter behind us.”

The settlement is part of the efforts by Chief Executive Larry Culp, who took over GE’s top job at the beginning of October, to reduce liabilities incurred through expansion by his predecessors, as he attempts to improve profitability and cash flow at GE’s core industrial operations.

Other large lenders including Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley and Royal Bank of Scotland have also settled U.S. mortgage securities claims.

The Swiss bank UBS Group AG is defending against similar claims in federal court in Brooklyn, New York.

GE’s case resolved claims under the Financial Institutions Reform, Recovery, and Enforcement Act, a 1989 law arising from that decade’s savings-and-loan scandals. The law has a 10-year statute of limitations.

GE’s shares were down 0.9 percent at $9.04 in afternoon trading on Friday.

In November 2008, the U.S. Department of the Treasury ranked WMC fourth on a list here of "worst subprime originators," based on how its loans fared in metropolitan areas with high foreclosure rates, including Detroit, Cleveland and Stockton, California.