FDIC Announces $62.95 million Settlement With Morgan Stanley Related to RMBS Claims — 2016-02-02

The Federal Deposit Insurance Corporation (FDIC), as receiver for three failed banks, today 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 the three failed banks.