Morgan Stanley says it expects lawsuit from NY Attorney General over subprime mortgage bonds

Economic Indicators Associated Press

Morgan Stanley, which agreed to a $2.6 billion settlement with the federal government last week, says it expects to be sued by New York Attorney General Eric Schneiderman over subprime mortgage bonds.

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The bank says it was told about the lawsuit in January and that it will involve about 30 subprime securities. Morgan Stanley say the lawsuit will say that it misrepresented or omitted important information related to loans and the properties securing them.

On Wednesday Morgan Stanley said it would pay $2.6 billion to settle with the federal government over its role in the mortgage bubble and subsequent financial crisis. Wall Street banks have paid tens of billions in similar settlements over the last two years, and Morgan Stanley has reached smaller settlements with federal and state agencies.