Banking giant Morgan Stanley & Co. on Thursday reached a $102 million settlement with Massachusetts over the firm’s subprime mortgage securitization practices, according to Massachusetts’ attorney general’s office.
According to a Boston Herald report, Morgan Stanley knew of the loose lending standards at New Century Financial, now defunct, and still securitized such mortgages into securities and sold them to clients.
The subprime mortgage crisis caused major upheaval in the financial markets and was directly responsible for investment bank Lehman Brothers Holdings Inc.’s collapse in September 2008.
