NEW YORK (AP) — Morgan Stanley said it has reached a preliminary agreement with the Securities and Exchange Commission to settle an investigation into the investment bank's subprime mortgage business.
Morgan Stanley agreed to pay $275 million in fines to settle the investigation, according to a regulatory filing made late Tuesday. The SEC's commissioners have not agreed to the settlement yet, and the bank said it had no assurances that the deal would be approved.
The bank reached the preliminary agreement on Jan. 30, it said, and would not admit or deny wrongdoing as part of the deal.
The SEC has been investigating Morgan Stanley, like many other Wall St. firms, for their practices leading up to the subprime mortgage crisis. The products in question, in Morgan Stanley's case, are residential mortgage bond products that were sponsored and underwritten by Morgan Stanley in 2007.
The $275 million would be a combination of giving up profits that were earned on the sale of the bonds as well as fines and penalties, the bank said in the filing.