The government won a big victory this week in a case against two banks that were found to have systematically deceived investors about shoddy mortgage securities they peddled during the housing bubble. “The magnitude of falsity, conservatively measured, is enormous,” wrote Judge Denise Cote of Federal District Court in Manhattan in a strongly worded 361-page ruling.

The banks are Nomura Holdings of Japan and the Royal Bank of Scotland. The investors are Fannie Mae and Freddie Mac, the government-run mortgage agencies. The case was brought by the Federal Housing Finance Agency, the overseer of Fannie and Freddie.

The government’s victory in this case raises an interesting question: If the relatively unknown housing finance agency could prevail over foreign banks, why haven’t far more powerful regulators and prosecutors at the Department of Justice and the Securities and Exchange Commission done more to expose and redress wrongdoing by big Wall Street banks in the mortgage bubble?

Image A judge ruled that the Royal Bank of Scotland misled investors during the housing bubble. Credit... Warren Allott/Agence France-Presse — Getty Images

The post-bubble role of the housing finance agency has been important but relatively narrow: to recoup losses attributable to securities law violations and, in some cases, fraud by banks that sold mortgages to Fannie and Freddie. It has settled most of its suits, and it went to court against Nomura and R.B.S. when the two refused to settle. Assuming an expected appeal fails, the banks will owe damages estimated at about $500 million.