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| Morgan Stanley said Wednesday it had reached a preliminary agreement with the Justice Department to pay $2.6 billion to settle a probe into its marketing of mortgage-backed securities (AFP Photo/Emmanuel Dunand) |
New York
(AFP) - Morgan Stanley said Wednesday it had reached a preliminary agreement
with the Justice Department to pay $2.6 billion to settle a probe into its
marketing of mortgage-backed securities.
The
settlement resolves claims the civil division of the Justice Department
"indicated it intended to bring against the company," Morgan Stanley
said in a securities filing.
The
investment bank previously described regulatory probes as focusing on the bank's
packaging of securities linked to subprime and non-subprime residential
mortgages ahead of the housing bust and financial crisis.
The probes
focused on issues including "the Company's due diligence on loans that it
purchased for securitization, the Company's communications with ratings
agencies, the Company's disclosures to investors, and the Company's handling of
servicing and foreclosure related issues," the bank said in a November
2014 filing.
On
Wednesday, Morgan Stanley trimmed its 2014 earnings from continuing operations
by $1.35 per share from the $2.96 per share previously reported in light of the
settlement.
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