This settlement brings total RMBS claim settlements by the FDIC with Morgan Stanley to $86.95 million
By Jeff Sorg, OnlineEd Blog
(February 3, 2016) – The Federal Deposit Insurance Corporation (FDIC), as receiver for three failed banks, yesterday announced a $62.95 million settlement of residential mortgage-backed securities (RMBS) claims against Morgan Stanley & Company LLC.
The settlement funds will be distributed among the receiverships for the three failed banks – Colonial Bank of Montgomery, Alabama, which failed on August 14, 2009; Security Savings Bank of Henderson, Nevada, which failed on February 27, 2009; and United Western Bank of Denver, Colorado, which failed on January 21, 2011. Along with $24 million from a settlement with Morgan Stanley last year of RMBS claims related to Franklin Bank, S.S.B., of Houston, Texas, which failed on November 7, 2008, this settlement brings total RMBS claim settlements by the FDIC with Morgan Stanley to $86.95 million.
This settlement resolves federal and state securities law claims based on misrepresentations in the offering documents for 14 RMBS purchased by three failed banks. :,Colonial Bank of Montgomery, Alabama, which failed on August 14, 2009; Security Savings Bank of Henderson, Nevada, which failed on February 27, 2009; and United Western Bank of Denver, Colorado, which failed on January 21, 2011.As receiver for failed financial institutions, the FDIC may sue professionals and entities whose conduct resulted in losses to those institutions in order to maximize recoveries. The FDIC as receiver for the three failed banks filed four lawsuits from February 2012 to January 2014 against Morgan Stanley and other defendants for violations of federal and state securities laws in connection with the sale of RMBS to the three failed banks.
As of December 31, 2015, the FDIC has filed 19 RMBS lawsuits on behalf of eight failed institutions, including the four lawsuits against Morgan Stanley, seeking damages for violations of federal and state securities laws. This settlement, which resolves all of the FDIC’s RMBS claims against Morgan Stanley that were brought in those lawsuits, was reached in coordination with the U.S. Department of Justice.
[Source: FDIC press release]
For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.
All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.
Jeff Sorg is a co-founder of OnlineEd®, an online real estate, mortgage broker, and vocational school founded in 1997, where he also serves as Chief Executive Officer, and School Director. Sorg holds vocational and post-secondary school instructor licenses in several states and has authored numerous real estate continuing education and pre-licensing courses and has been awarded the International Distance Education Certification Center’s CDEi Designation for distance education. Memberships include ARELLO (Association of Real Estate License Law Officials), the National Association of REALTORS®, Oregon Association of REALTORS®, and Portland Metro Association of REALTORS®. Awards and service include REALTOR® Emeritus in the National Association, Life Member award in Portland Metro Association and Chairperson of the Oregon Real Estate Forms Committee.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.