Morgan Stanley agrees to $102M settlement with Mass. over backing of high-risk mortgages

Mass. reaches $102M settlement with Morgan Stanley

BOSTON — Morgan Stanley has agreed to a $102 million settlement following an investigation into subprime mortgage lending in Massachusetts.

State Attorney General Martha Coakley announced the settlement with the investment bank on Thursday. It calls for Morgan Stanley to provide $60 million to borrowers and the rest to the state treasury and to state agencies that had invested in securities backed by the risky loans.

Coakley said the majority of the risky loans were made by New Century Financial Corp. and backed by Morgan Stanley. New Century filed for bankruptcy in 2008.

Morgan Stanley said in a brief statement that it was pleased to pleased to resolve the matter.

The attorney general announced a similar agreement in May 2009 with Goldman Sachs.