Morgan Stanley has agreed to pay $2.6 billion to settle federal charges over its role in the mortgage bubble and subsequent financial crisis. The investment bank said late Wednesday the $2.6 billion 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 $2.8 billion 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 finalized and could fall though.
IN-DEPTH
- S&P Settles Mortgage Crisis Charges for $1.38B
- Citigroup Agrees to $7 billion Settlement in Mortgage Probe