- Category: Economic
- Published Thursday, February 11, 2016
- CTV News
ALBANY, N.Y. -- Federal and state authorities have reached a $3.2 billion settlement with Morgan Stanley over bank practices that contributed to the 2008 financial crisis including misrepresentations about the value of mortgage-backed securities.
The nationwide settlement, negotiated by the working group appointed by President Barack Obama in 2012, says the bank acknowledges that it increased the acceptable risk levels for mortgage loans pooled and sold to investors without telling them.
Authorities say loans with material defects were included, packaged into the securities and sold.
For New York state, the settlement includes $400 million of mortgage reductions and other consumer and community relief and $150 million in cash. State Attorney General Eric Schneiderman is co-chair of the working group.
Morgan Stanley says it previously reserved funds for all settlement amounts.