Morgan Stanley Strikes $2.6bn Deal to Settle Mortgage Bubble Case
CAPITALISM, 2 Mar 2015
Associated Press – The Guardian
- Payment will ‘resolve certain claims’ by Justice Department
- Investment bank faced charges over role in financial crisis
Morgan Stanley had set aside $2.8bn in January to cover ongoing issues with its residential mortgage-backed securities division. Photograph: Stan Honda/AFP/Getty Images
26 Feb 2015 – Morgan Stanley has agreed to pay $2.6bn to settle federal charges over its role in the mortgage bubble and subsequent financial crisis.
The investment bank said late on Wednesday [25 Feb 2015] the $2.6bn will go to “resolve certain claims” the Justice Department intended to bring against Morgan Stanley. The settlement was disclosed in regulatory filing.
Those specific claims were not disclosed. Morgan Stanley said in January it increased its legal reserves by $2.8bn to cover ongoing issues with its residential mortgage-backed securities division. Morgan is the latest bank, just like Citigroup, Bank of America and JPMorgan Chase, to pay billions to settle pending charges related to its role in the 2008 financial crisis.
The Justice Department declined to comment. The agreement has not been finalised and could fall though.
Go to Original – theguardian.com
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