Morgan Stanley (MS) Stock May Trade Lower Today, Awaits Lawsuit From NY Attorney General
NEW YORK (TheStreet) -- Shares of Morgan Stanley (MS) - Get Report are up 0.42% to $35.94 in afternoon trading Monday, as the company expects to be sued by New York Attorney General Eric Schneiderman regarding subprime mortgage bonds, according to the Associated Press.
The bank says it was told about the lawsuit back in January, and will involve about 30 subprime securities.
The lawsuit is expected to say that Morgan Stanley misrepresented or omitted important information related to the loans and the properties securing them, the AP added.
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Morgan Stanley agreed to a $2.6 billion settlement with the federal government last week over its role in the financial crisis.
Last Thursday, TheStreet's Jim Cramer and Jack Mohr wrote on ActionAlertsPLUS.com what they think about this settlement. Here's a snippet of what they had to say:
The $2.6 billion charge, albeit large, is still less than what we were expecting (about $3 billion), and likely represents the largest remaining piece of financial crisis litigation. We believe its major remaining litigation charges relate to mortgages ($1 billion potential settlement), FX trading ($580 million potential settlement) and credit-default-swap antitrust matters, which we have yet to estimate but will likely be a fraction of the other charges. Mortgage-related litigation is split among multiple cases, and MS has a legal reserve for these matters.
- Jim Cramer and Jack Mohr, 'Morgan Stanley Loses Big Overhang' originally published 2/26/2015 on ActionAlertsPLUS.com.
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Morgan Stanley has previously agreed to smaller settlements with other federal and state agencies including a $1.25 billion payment in 2014 to the Federal Housing Finance Authority.
Other large Wall Street banks have reached similar settlements. Bank of America (BAC) - Get Report agreed to pay a record $16.7 billion last year, and JPMorgan Chase (JPM) - Get Report settled for $13 billion in 2013.
New York City-based Morgan Stanley is a global financial services company that provides its products and services to a range of clients and customers, including corporations, governments, financial institutions and individuals.