Morgan Stanley to pay US$3.2B over contributors to '08 crisis

ALBANY, N.Y. -- Morgan Stanley will pay US$3.2 billion in a settlement over bank practices that contributed to the 2008 financial crisis, including misrepresentations about the value of mortgage-backed securities, authorities announced Thursday.

See Full Article

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. Loans with material defects were included, packaged into the securities and sold.

Morgan Stanley said it previously reserved funds for all related amounts. The bank acknowledged an agreement in principle for the federal settlement of $2.6 billion in a regulatory filing a year ago.

"We are pleased to have finalized these settlements involving legacy residential mortgage-backed securities matters," spokesman Mark Lake said Thursday.

The Justice Department said the $2.6 billion federal penalty to resolve claims about the bank's marketing, sale and issuance of those securities is the largest piece of settlements with the working group that have totalled approximately $5 billion. Illinois will get $22.5 million in the settlements announced Thursday.

For New York state, the settlement includes $400 million of mortgage reductions and other consumer and community relief, as well as $150 million in cash. State Attorney General Eric Schneiderman co-chairs the working group.

"Today's settlement will bring money to the families and communities that need resources the most, while helping New Yorkers avoid foreclosure and spurring the construction of more affordable housing statewide," Schneiderman said.

The $400 million will go toward the creation and preservation of affordable rental housing, land banks, code enforcement, communities purchasing distressed properties, and principal reductions for homeowners, according to the attorney general's office.

The New York-based investment bank reported a fourth-quarter profit of $908 million. It recorded $3.1 billion in legal expenses in 2014 for settlements with state and federal regulators over its role in the housing bubble and subsequent financial crisis.



Advertisements

Latest Economic News

  • Why do you need a pet insurance, right here, right now

    Economic 24news
    Many Canadians would consider their pets as a part of their immediate, granular, family. Although some professionals think it’s not healthy, that’s the way life is in the twenty first century; There is a steep decline in the birth rate globally, with Japan leading the pack, and pets are filling in the void.
  • Amazon to debut store without checkout in downtown Seattle

    Economic CTV News
    SEATTLE - Amazon employees have been testing it, but is the public ready for a cashier-less store? More than a year after it introduced the concept, Amazon is opening its artificial intelligence-powered Amazon Go store in downtown Seattle on Monday. Source
  • Asian stocks mixed after U.S. government shutdown

    Economic CTV News
    BEIJING - Asian stock markets were mixed Monday after global investors shrugged off the latest U.S. government shutdown. KEEPING SCORE: The Shanghai Composite Index rose 0.2 per cent to 3,495.40 while Tokyo's Nikkei 225 lost 0.2 per cent to 23,764.96. Source
  • Amazon to debut cashier-less store in downtown Seattle

    Economic CTV News
    SEATTLE -- Amazon employees have been testing it, but is the public ready for a cashier-less store? More than a year after it introduced the concept, Amazon is opening its artificial intelligence-powered Amazon Go store in downtown Seattle on Monday. Source
  • 'Archaic' liquor laws in B.C. hurt consumers, whisky distributor says

    Economic CTV News
    VANCOUVER -- An Alberta-based whisky distributor says "archaic" liquor policies in British Columbia are limiting the range of products consumers can access. Robert Carpenter with the Scotch Malt Whisky Society says B.C. bars have long skirted rules that prevent them from buying unique products at private liquor stores that aren't carried at government stores. Source
  • With a deep tech talent pool, Toronto could hit Amazon's 'sweet spot' with bid for new HQ

    Economic CBC News
    Toronto faces stiff competition in its bid to court Amazon, but some Canadian tech experts agree that among the 20 cities short-listed as potential locations for the company's second headquarters, Toronto might just hit "the sweet spot. Source
  • HBC's Lord & Taylor to lay off 200 in U.S. operations move

    Economic CTV News
    WILKES-BARRE, Pa. -- Lord & Taylor has announced that it will be laying off about 200 people at a Pennsylvania distribution centre as it moves some operations to a new location about 80 kilometres away. Source
  • Four things to watch for in the Canadian business world in the coming week

    Economic CTV News
    TORONTO -- Four things to watch for in the Canadian business world in the coming week: Time to have "the talk"? Alimentation Couche-Tard's hosts its first-ever investor day on Monday. The large convenience store chain, which operates as Circle K outside Quebec, recently said it hasn't given up hope of selling cannabis as some Western Canadian provinces turn to the private sector for over-the-counter sales. Source
  • Canadian tech CEOs disappointed Amazon won't be coming to their cities

    Economic CTV News
    CALGARY -- Tech sector entrepreneurs whose Canadian cities were snubbed by Amazon in its search for a second corporate campus say they are disappointed, despite fears they would have seen increased competition for scarce skilled talent. Source
  • Rogers sales tactics and the 'Tide pod challenge': CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Rogers employees reveal sales pressures A number of Rogers employees have come forward about how they are coached to upsell customers. Source