FDIC settles Morgan Stanley RMBS claims

The Federal Deposit Insurance Corporation (FDIC), as receiver for three failed banks, has announced a $62.95 million settlement of residential mortgage-backed securities (RMBS) claims against Morgan Stanley & Company LLC. Together with a 2008 settlement, total RMBS claim settlements with Morgan Stanley now total $86.95 million. The settlements resolve federal and state securities law claims based on misrepresentations in the offering documents for RMBS purchased by failed banks. 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.