Deutsche Welle, 5 February 2014
US banking
giant Morgan Stanley has agreed in principle to pay a $1.25-billion settlement
for its involvement in the housing market bust. The bank allegedly misled
investors about mortgage-backed securities.
Although
still subject to final approval, Tuesday's settlement would resolve a 2011
lawsuit filed by the US Federal Housing Finance Agency (FHFA) against Morgan
Stanley.
The FHFA
accuses the Wall Street firm of making false statements and omitting
information in the sale of around $11 billion (8 billion euros) in
mortgage-backed securities to Fannie Mae and Freddy Mac. The later two
companies, which are state sponsored, provide funding to the US housing market.
US banks
have faced a host of lawsuits since the 2008 financial crisis. In November, JP
Morgan Chase agreed to pay $13 billion, the largest settlement ever paid by a
corporation in a government settlement.
slk/jm (AFP, Reuters, dpa)
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