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Morgan Stanley (MS) Will Pay $275M for Misleading Investors in Subprime RMBS Offerings - SEC

July 24, 2014 11:11 AM EDT

The Securities and Exchange Commission today charged three Morgan Stanley (NYSE: MS) entities with misleading investors in a pair of residential mortgage-backed securities (RMBS) securitizations that the firms underwrote, sponsored, and issued.

Morgan Stanley agreed to settle the charges by paying $275 million to be returned to harmed investors.

In an asset-backed securities offering, federal regulations under the securities laws require the disclosure of delinquency information for the mortgage loans serving as collateral. An SEC investigation found that Morgan Stanley misrepresented the current or historical delinquency status of mortgage loans underlying two subprime... More