Washington - The financial company Morgan Stanley on Wednesday agreed to pay $2.6 billion to settle an investigation into its role in the 2008 financial crisis, becoming the latest firm to reach such a deal with the government.
A statement from the Securities and Exchange Commission (SEC) said the agreement had been reached “in principle” with the civil division of the US Justice Department to resolve “certain claims” that the division “indicated it intended to bring against the company”.
The SEC regulates the US financial industry.
In the lead-up to the 2008 US financial crisis that triggered a global recession, US banks and investment firms had been selling troubled and deceptive mortgage-backed securities.
The availability of easy loans for home purchases triggered a housing bubble that started collapsing in 2007.
To date, the three biggest US banks - JPMorgan Chase, Bank of America and Citigroup - have agreed to pay out more than $35 billion in consumer relief and cash under pressure from justice officials.
The mortgage industry's practices brought the US finance system to the brink of instability and provoked a global recession. Millions of homeowners defaulted on their loans, and their homes were repossessed by the banks.
The US government bailed out a number of the banks, but has been repaid most of the money.
Over the past two years, Bank of America has agreed to a record settlement of $16.65 billion; Citigroup has made a $7-billion settlement; and JPMorgan Chase agreed to pay $13 billion.
Sapa-dpa