Securities Fraud Experts & Morgan Stanley $2.6B Penalty

Business_Finance_14080Securities fraud expert witnesses may consult and testify on the illegal process of convincing others to make investments in the stock market based on false information. These cases may involve mortgage backed securities, asset backed securities, as well as other types of securities and investments. The Justice Department today announced that Morgan Stanley will pay a $2.6B penalty to resolve claims related to Morgan Stanley’s marketing, sale and issuance of residential mortgage-backed securities. Morgan Stanley acknowledged in writing that it failed to disclose critical information to prospective investors about the quality of the mortgage loans underlying its RMBS and about its due diligence practices.  Investors, including federally insured financial institutions, suffered billions of dollars in losses from investing in RMBS issued by Morgan Stanley in 2006 and 2007.

Department of Justice Acting Associate Attorney General Stuart F. Delery stated:

Today’s settlement holds Morgan Stanley appropriately accountable for misleading investors about the subprime mortgage loans underlying the securities it sold.  The Department of Justice will not tolerate those who seek financial gain through deceptive or unfair means, and we will take appropriately aggressive action against financial institutions that knowingly engage in improper investment practice.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said the “resolution demonstrates once again that the Financial Institutions Reform, Recovery and Enforcement Act is a powerful weapon for combating financial fraud and that the department will not hesitate to use it to hold accountable those who violate the law.”

About Karen Olson

Information Professional with twenty years experience in legal, public record, and business research. Fifteen years law firm experience.

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