Justice Department to Settle with Morgan Stanley in 2015: Report

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The Justice Department is aiming to settle a probe into Morgan Stanley’s subprime mortgage business by early 2015, according to a report Tuesday by The New York Times.

The Justice Department is looking into the Morgan Stanley’s relationship with now-defunct lender New Century during the lead up to the financial crisis, the Times reported, citing an unnamed source.

The investigation focuses, in particular, on the Morgan Stanley’s sale of mortgage securities in the run-up to the crisis. The bank was the largest buyer of subprime loans from New Century, the Times said.

“Morgan Stanley is involved in almost every strategic decision that New Century makes in securitized products,” according to an internal report from the bank, cited in the Times report.

A spokeswoman for Morgan Stanley declined to comment.

Article source: http://www.nationalmortgagenews.com/news/compliance/justice-department-to-settle-with-morgan-stanley-in-2015-report-1043491-1.html

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