None of the $3.2 Billion will come out of the pocket of any of the crooked millionaire executives at Morgan Stanley. That money will be paid by the corporation.
Morgan Stanley to Pay $3.2 Billion Over Flawed Mortgage BondsBy NATHANIEL POPPER
Morgan Stanley will pay $3.2 billion to strike a settlement with state and federal authorities over the Wall Street firm’s creation of mortgage-backed bonds before the financial crisis.
Nearly a year ago, Morgan Stanley announced that it expected to pay $2.6 billion to federal authorities in the settlement. Since then, though, Morgan Stanley was pushed to offer more money. Much of the additional money will go to New York State.
The settlement, which was announced Thursday morning, is one of the last that is expected to come out of a working group that President Obama helped form in 2012 to deal with the flawed mortgaged-backed bonds that banks put together before the financial crisis. In the go-go years that preceded the crisis, Wall Street banks purchased subprime mortgages and packaged them into bonds that ended up suffering significant losses.
Because Morgan Stanley did not originate mortgages itself, its settlement is much smaller than those struck by large consumer banks like Bank of America, which paid $16.6 billion in its 2014 settlement.
Morgan Stanley said on Thursday that it had set aside legal reserves to cover the agreement and would not take any additional charges in its coming financial results.
“We are pleased to have finalized these settlements involving legacy residential mortgage-backed securities matters,” a spokesman for the firm, Mark Lake, said in a statement.