Morgan Stanley has settled with Massachusetts in a subprime lending case. The investment bank agreed to a $102 million settlement following an investigation into subprime mortgage lending. State Attorney General Martha Coakley announced the settlement with Morgan Stanley on June 24th. The settlement calls for Morgan Stanley to provide $60 million to borrowers and the rest to the state treasury and to state agencies that had invested in securities backed by the risky loans.
Attorney General Coakley said the majority of the risky loans were made by New Century Financial Corp. and backed by Morgan Stanley. New Century filed for bankruptcy in 2008. You may recall we reported last year that the attorney general had reached a similar agreement in May 2009 with Goldman Sachs.
Source: Associated Press and USA Today
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