Do you think that since they sold the applications of borrowers to the investment banks that maybe these were actually securities sales, rather than traditional mortgages? If you found out you were unwittingly participating in a securities fraud scheme – what would you do?
Morgan Stanley has agreed to pay $95 million (59 million pounds) to resolve a lawsuit accusing the Wall Street bank of misleading investors in mortgage-backed securities in the run up to the 2008 financial crisis.
The settlement, disclosed in court papers filed Monday in New York federal court, follows years of litigation by investors over allegedly false and misleading statements over the soured securities.
The deal stemmed from a lawsuit pursued by the Public Employees’ Retirement System of Mississippi (MissPERS) and the West Virginia Investment Management Board.
The plaintiffs accused Morgan Stanley of violating U.S. securities law in packaging and selling mortgage backed securities in 13 offerings in 2006 and 16 offerings in 2007.