NEW YORK – U.S. financial firm Morgan Stanley has announced that it has entered into an agreement with the authorities to pay $2.6 billion to close legal claims related to mortgage securities that collapsed during the last financial crisis.
The New York-based group said in a notification made to the Securities and Exchange Commission that the agreement in principle was made with the U.S. Department of Justice and the public prosecutor in the northern district of California.
When reporting this agreement, Morgan Stanley said that the agreed upon amount, as well as other legal expenses, will be reduced from its annual results with a total of $2.6 billion.
According to investigations, firms such as Morgan Stanley cheated investors with mortgage bonds whose value fell drastically during the financial crisis of 2008.
U.S. authorities have come to similar agreements on the same issue with other financial firms like JP Morgan Chase, Citigroup and Bank of America, which have agreed to pay a total of $35 billion.
Morgan Stanley last year closed two other agreements with the authorities over other legal disputes with a total of $1.5 billion, for cheating investors in the sale of mortgage bonds or the sale of bad assets.