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February 5, 2014

Morgan Stanley to Pay $1.25 Billion for Toxic Securities 
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The banking giant Morgan Stanley has agreed to pay a $1.25 billion fine
for selling toxic securities to the federally-backed Fannie Mae and
Freddie Mac. The money will go to the Federal Housing Finance Agency,
which has sued Morgan Stanley and more than a dozen other firms for
packaging and selling mortgage securities at inflated prices ultimately
borne by U.S. taxpayers when the economy crashed in late 2008. Morgan
Stanley is said to have falsely marketed over $10 billion in securities
it sold to Fannie and Freddie. Also Tuesday, the financial giant
JPMorgan agreed to a $614 million fine for thousands of flawed mortgages
whose losses were ultimately covered by taxpayers. JPMorgan has paid the
government over $20 billion in fines and penalties over the past year.

 

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