Morgan Stanley has agreed to pay over $62.95 million to settle federal and state securities law claims based on misrepresentations in the offering documents for 14 residential mortgage-backed securities (RMBS) purchased by three failed banks. The Federal Deposit Insurance Corporation’s announcement of the settlement states that the funds will be distributed among the receiverships for Colonial Bank of Montgomery, Ala.; Security Savings Bank of Henderson, Nev.; and United Western Bank of Denver, Colo.
The FDIC, as receiver for the failed banks, filed lawsuits from February 2012 to January 2014 against Morgan Stanley and other defendants for violations of federal and state securities laws in connection with the sale of RMBS to the banks.
According to the Settlement and Release Agreement, Morgan Stanley denies all liability with respect to all claims that the FDIC brought.
Companies: Colonial Bank; Morgan Stanley & Company LLC; Security Savings Bank; United Western Bank
MainStory: TopStory EnforcementActions Mortgages SecuritiesDerivatives
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