Morgan Stanley To Pay $1.25B In Fannie, Freddie MBS Row

Law360, Los Angeles (February 4, 2014, 7:47 PM EST) -- Morgan Stanley has agreed to pay $1.25 billion to settle a Federal Housing Finance Agency suit over toxic mortgage-backed securities sold to Fannie Mae and Freddie Mac, the company disclosed in a regulatory filing Tuesday.

The agreement is subject to final approval by both parties, according to the 8-K form filed with the U.S. Securities and Exchange Commission. As part of the settlement, Morgan Stanley will add $150 million to its legal reserves, which will cut fourth-quarter and 2013 after-tax earnings by $97 million, or five...
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