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Morgan Stanley to pay $3.2 billion to settle mortgage charges

Staff writer |
Morgan Stanley will pay about $3.2 billion to settle charges that it misled investors in residential mortgage-backed securities that later soured during the financial crisis.

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The case stems from an investigation by the Residential Mortgage-Backed Securities Group, a joint federal and state task force unveiled in 2012 by President Barack Obama that serves to probe potential misconduct from the financial crisis.

Of the $3.2 billion to be paid, $2.6 billion will go toward resolving claims brought by the U.S. Justice Department.

Another $550 million will go to New York and another $22.5 million will settle a case with Illinois.

The Justice Department said that as part of the accord, Morgan Stanley acknowledged that it failed to disclose information to prospective investors about the quality of the mortgages.


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