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Morgan Stanley paying $275M to settle charges

WASHINGTON (AP) — Morgan Stanley has agreed to pay $275 million to settle U.S. civil charges that it misled investors about risky mortgage bonds it sold ahead of the 2008 financial crisis.

The Securities and Exchange Commission announced the settlement Thursday with the Wall Street bank. 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.

The mortgages underlying the securities had a total value of about $2.5 billion, according to the SEC.

New York-based Morgan Stanley neither admitted nor denied the allegations. “We’re pleased to have settled this matter,” said spokesman Mark Lake.

The $275 million Morgan Stanley is paying includes a $96.4 million penalty and $160.6 million in restitution of profits from sales of the bonds, plus about $18 million in interest. It will be returned to investors in the deals who were harmed, the SEC said.