NEW YORK - Morgan Stanley (MS) has agreed to pay $2.6 billion to settle federal charges over its role in the mortgage bubble and subsequent financial crisis.
The investment bank said late Wednesday the $2.6 billion will go to "resolve certain claims" the Justice Department intended to bring against Morgan Stanley. The settlement was disclosed in regulatory filing.
Those specific claims were not disclosed. Morgan Stanley said in January it increased its legal reserves by $2.8 billion to cover ongoing issues with its residential mortgage-backed securities division. Morgan is the latest bank, just like Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM), to pay billions to settle pending charges related to its role in the 2008 financial crisis.
The Justice Department declined to comment. The agreement has not been finalized and could fall though.
It comes on the same day that the Justice Department said MetLife's (MET) home lending unit will pay $123.5 million to end an investigation into allegations it gave government-backed mortgages to people who didn't meet federal requirements.
The Justice Department said Wednesday that MetLife knew the business was issuing hundreds of loans that didn't meet federal requirements, which means they were not eligible for insurance by the Federal Housing Authority. But MetLife granted the mortgages anyway, and the agency says the FHA and taxpayers were stuck with the bill when defaults followed.