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Morgan Stanley to Pay $3.2 Billion to Settle Allegation of Fraud

HeadlineFeb 12, 2016
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In news from Wall Street, banking giant Morgan Stanley will pay $3.2 billion to settle a slew of federal and state charges that the bank lied to investors about the value of residential mortgage-backed securities, which played a role in triggering the global financial recession that began in late 2007. This is the latest in a series of financial settlements by banking giants charged with lying about the value of the toxic mortgage-backed securities. President Obama set up a working group in 2012 to investigate wrongdoings in the mortgage market in the lead-up to the financial crisis. So far, this working group has led to Bank of America paying out $16.6 billion, JPMorgan paying out $13 billion and Citigroup paying out $7 billion in settlements, in addition to Morgan Stanley’s settlement announced Thursday. The investigations have not led to criminal charges or jail time for any banking executives involved.

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