Block on Trump's Asylum Ban Upheld by Supreme Court
Morgan Stanley will pay $150 million for cheating teachers and other public employees in California, the state attorney general announced.
The payment settles claims that the company concealed high-risk securities it sold to the state's major retirement funds. According to reports, the risky investments severely undercut the California Public Employees' Retirement System and the California State Teachers Retirement System. The bank agreed to pay the settlement but did not admit any wrongdoing. In a press release, however, the attorney general called out the "cheaters on Wall Street."
Attorney General Xavier Becerra said Morgan Stanley lied about the risk of its products. He said the company put "profits over teachers and public employees" who relied on the company's advice. "Today's settlement holds Morgan Stanley accountable for misleading Californians who were unfairly blindsided," Becerra said. "Our office has recovered over $1 billion from cheaters on Wall Street since the financial crisis."
Reuters reported that Morgan Stanley overstated the quality of subprime loans from lenders, bundling them with other securities that CalPERS and CalSTRS bought from 2003 to 2007. New Century Financial, one of those lenders, went bankrupt in 2007. Becerra said California has recovered $1.3 billion for losses related to the 2008 financial crisis, which led to the Great Recession. Bank of America and J.P. Morgan Chase paid the largest settlements, each paying about $300 million.
California's lawsuit was one of hundreds accusing banks of misleading investors in mortgage-backed securities. In 2016, Morgan Stanley agreed to pay another $3.2 billion to resolve federal and state claims over those securities. The bank denied the claims of wrongdoing, and said the California settlement resolves the last government claim against it related to the financial crisis.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.
Sign into your Legal Forms and Services account to manage your estate planning documents.Sign In
Create an account allows to take advantage of these benefits: