Morgan Stanley reduced second-quarter earnings per share by 2 cents after reaching agreements to end mortgage-related lawsuits. The firm said it may face additional claims from authorities in California.
Bloomberg News reports that Morgan Stanley, which had initially reported earnings on July 17, reached preliminary deals that month to resolve three class-action suits, boosting legal accruals by $53m, according to the firm’s quarterly regulatory filing.
That would bring the company’s second-quarter profit to 92 cents a share.
California’s attorney general’s office separately indicated in May it may seek penalties over mortgage-backed securities marketed to the California Public Employees Retirement System, according to yesterday’s filing. The attorney general’s conclusions were preliminary and Morgan Stanley has presented defenses on the matter, the bank said.
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