Morgan Stanley To Pay $150 Million To Settle California Case (#GotBitcoin?)
State attorney general alleges the bank misled investors about the risks tied to certain products. Morgan Stanley To Pay $150 Million To Settle California Case (#GotBitcoin?)
California’s attorney general said Morgan Stanley MS -0.17% has agreed to pay $150 million to settle allegations the company misled investors, including pension funds serving the state’s teachers and public employees.
“Morgan Stanley lied about the risk of its products and put profits over teachers and public employees who relied on its advice,” Attorney General Xavier Becerra said Thursday in a statement. “Today’s settlement holds Morgan Stanley accountable for misleading Californians who were unfairly blindsided.”
Under the agreement, Morgan Stanley denies the allegations and all claims of wrongdoing.
A Morgan Stanley spokesman said this was the company’s final regulatory settlement related to the financial crisis.
Morgan Stanley was alleged to have misled investors by concealing high risks involved with mortgage-backed securities it sold. Both the California Public Employees’ Retirement System and the California State Teachers Retirement System purchased these securities between 2003 and 2007.
The settlement resolves the allegation, the attorney general said.
Calpers will recover $122 million in damages and Calstrs will recover $8 million, with the remaining $20 million going to the office of the attorney general to recover costs related to the investigation and lawsuit, and to help with future investigations and prosecutions.
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