FHFA reaches $1.25 billion settlement with Morgan Stanley.

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On Feb. 7, the Federal Housing Finance Agency (FHFA) announced it had reached a settlement with Morgan Stanley, related companies and certain named individuals for $1.25 billion. The settlement addresses claims FHFA brought in a lawsuit against Morgan Stanley that the company violated federal and state securities laws and common law fraud with regard to private-label securities (PIS) purchased by the government-sponsored enterprises (GSEs).

The lawsuit brought by FHFA (FHFA v. Morgan Stanley et al.) was filed in the U.S. District Court of the Southern District of New York.

As part of the terms of the settlement, Morgan Stanley will pay $625 million each to Fannie Mae and...

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