Morgan Stanley to pay $275 milion to settle charges with Securities and Exchange Commission

Morgan Stanley has agreed to pay $275 million

Morgan Stanley has agreed to pay $275 million to settle civil charges that it misled investors about risky mortgage bonds it sold before the 2008 financial crisis.The Morgan Stanley headquarters sign gets a polish on Jan. 19, 2010 in Manhattan. (Credit: AP / Mark Lennihan)

WASHINGTON - Morgan Stanley has agreed to pay $275 million to settle U.S. civil charges that it misled investors about risky mortgage bonds it sold before the 2008 financial crisis.

The Securities and Exchange Commission announced the settlement Thursday. The SEC said Morgan Stanley failed to accurately disclose the delinquency status of home mortgages backing two securities deals that it financed and sold in 2007.

Manhattan-based Morgan Stanley neither admitted nor denied the allegations.


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The $275 million Morgan Stanley is paying will be returned to investors in the deals that were harmed, the SEC said.

When the housing bubble burst in 2007, millions of home borrowers defaulted on their loans and bundles of mortgages sold by big banks left investors with billions in losses.

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