- Deal with NCUA resolves claims over bank's RMBS practices
- Agency accused Morgan Stanley of selling faulty securities
Morgan Stanley agreed to pay $225 million to resolve a U.S. regulator’s lawsuits accusing the bank of selling faulty mortgage-backed securities that contributed to the collapse of credit unions during the financial crisis.
The settlement announced Thursday by the National Credit Union Administration concludes 2013 lawsuits against the bank in New York and Kansas federal courts, the agency said. Morgan Stanley agreed to settle without admitting fault, according to the Alexandria, Virginia-based regulator.
“NCUA continues to pursue recoveries on behalf of the corporate credit unions against the financial firms we maintain contributed to the corporates’ losses,” NCUA Board Chairman Debbie Matz said in a statement.
The agency is still proceeding with suits against firms including Goldman Sachs Group Inc., UBS AG and Credit Suisse Group AG for their sales of residential mortgage-backed securities that contributed to the failures of corporate credit unions following the 2008 financial crisis. The corporate credit unions, which had to be seized by the regulator in the years after the 2008 financial crisis, provided wholesale investment services to consumer credit unions.
In October, the NCUA announced similar settlements with Wells Fargo & Co. for $53 million and Barclays Plc for $325 million. The credit union-related settlements so far total more than $2 billion.
Mark Lake, a spokesman for New York-based Morgan Stanley, declined to comment on the settlement.