Morgan Stanley has consented to pay almost $63 million to settle claims over the selling of unfair home loan sponsored securities to three banks that later failed, the Federal Deposit Insurance Corp said on Tuesday.
The settlement settles lawsuits that the U.S. regulator submitted as recipient for the three failed banks against Morgan Stanley and different defendants over what the FDIC said were distortions in the offering documents for the mortgage-backed securities.
Morgan Stanley declined remark on the settlement. It was the most recent stride by the Wall Street bank to settle U.S. government claims coming from the sale of mortgage bonds before the financial crisis.
In February 2015, Morgan Stanley said it had achieved an agreement on a fundamental level to pay $2.6 billion as a major aspect of a settlement with the U.S. Justice Department over mortgage bonds.
The most recent settlement took after a FDIC accord a year ago in which Morgan Stanley consented to pay $24 million over mortgage-backed securities sold to a fourth failed bank, Franklin Bank of Houston.
The National Credit Union Administration in December independently declared that the Wall Street bank would pay $225 million to settle identical cases over securities sold to credit unions that later failed.
The FDIC said the assets from the most recent $62.95 million arrangement would be divided among the receivership for Colonial Bank of Montgomery, Alabama; Security Savings Bank of Henderson, Nevada; and United Western Bank of Denver.
The FDIC, which has documented 19 claims over mortgage-backed securities, said the settlement came in a joint effort with the Justice Department and brought its overall recuperation from Morgan Stanley to $86.95 million.
