Morgan Stanley has reached a $95m deal to settle a lawsuit accusing it of misleading investors in mortgage-backed securities in the run up to the 2008 financial crisis, Reuters has reported.
In their complaint, plaintiffs Public Employees’ Retirement System of Mississippi (MissPERS) and the West Virginia Investment Management Board accused Morgan Stanley of violating US securities law in packaging and selling mortgage backed securities in 13 offerings in 2006 and 16 offerings in 2007.
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In court papers filed in New York federal court, lawyers for the plaintiffs said they expected investors would on average receive a distribution of $2.63 per $1,000 in original face value offered.
Lawyers for the plaintiffs would also seek approval of a fee award of 17% of the settlement, or US$16.2 million, plus up to US$2 million in expense reimbursements, Reuters said.
The settlement must be approved by US District Judge Katherine Forrest, who took over the case in May.
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