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February 10, 2014
Morgan Stanley settles with FHFA for $1.25B
Feb. 12, 2014 – The Federal Housing Finance Agency on Friday announced a settlement of $1.25 billion with Morgan Stanley and related companies and individuals over the sale of private-label mortgage backed securities.
The settlement follows the lawsuit FHFA v. Morgan Stanley, et al., in the U.S. District Court of the Southern District of New York. FHFA sued for violation of federal and state securities laws and common law fraud related to private-label mortgage-backed securities, or PLS, purchased by Fannie Mae and Freddie Mac during the financial crisis, between 2005 and 2007.
Morgan Stanley will pay $625 million to both Fannie and Freddie, which are under FHFA's conservatorship. FHFA, Fannie and Freddie will also release certain claims against Morgan Stanley as a result of the settlement. FHFA said this was the seventh settlement resulting from 18 lawsuits filed in 2011, related to PLS.
The settlement follows the lawsuit FHFA v. Morgan Stanley, et al., in the U.S. District Court of the Southern District of New York. FHFA sued for violation of federal and state securities laws and common law fraud related to private-label mortgage-backed securities, or PLS, purchased by Fannie Mae and Freddie Mac during the financial crisis, between 2005 and 2007.
Morgan Stanley will pay $625 million to both Fannie and Freddie, which are under FHFA's conservatorship. FHFA, Fannie and Freddie will also release certain claims against Morgan Stanley as a result of the settlement. FHFA said this was the seventh settlement resulting from 18 lawsuits filed in 2011, related to PLS.
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