News
Morgan Stanley Reaches $2.4B Mortgage Settlement
February 26, 2015
Morgan Stanley agreed yesterday to settle with the Justice Department for $2.4B over its sale of mortgage securities in the lead-up to the Great Recession. The tally will erase the bank's $1B in 4Q14 profits, cut its full-year profits by 40% and reduce annual earnings per share to $1.61 from $2.96. Despite the blow, Morgan Stanley, which sold fewer controversial mortgage securities than its rivals, settled for far less than other Wall Street players including Bank of America ($16.7B last year) and JPMorgan Chase ($13B in 2013). Of the major banks, only Goldman Sachs has yet to reach an accord with the Justice Department, which has resolved to make Wall Street pay for its role in the housing bubble and subsequent collapse.
