Morgan Stanley will pay $63m to settle a series of government lawsuits claiming the bank misrepresented securities it sold to banks that later failed, the Federal Deposit Insurance said in a statement Tuesday.
Bloomberg News reports that the FDIC sued the lender after taking over three banks that had failed following the 2008 financial crisis. The FDIC accused Morgan Stanley of violating laws in the sale of 14 residential mortgage-backed securities offerings to the banks in Alabama, Nevada and Colorado, the agency said.
The settlement - coordinated with the Department of Justice - doesn’t represent 'an admission or evidence of liability', according to the agreement. This latest settlement brings the total collected from Morgan Stanley by the FDIC to $86.95m for mortgage-backed securities claims. The money will go to cover losses the smaller banks incurred in their failures.
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