Morgan Stanley to pay $130 million to California pensions
SACRAMENTO, Calif. (AP) — One of the world’s largest investment banks has agreed to put $130 million in the nation’s biggest public pension system to settle accusations it knowingly sold bad investments.
California Democratic Attorney General Xavier Becerra announced the settlement with Morgan Stanley on Thursday. The bank will pay $150 million. Of that, $122 million will go to the California Public Employees’ Retirement System and $8 million will go to the California State Teachers’ Retirement System. The rest will go to the Attorney General’s office.
Becerra said the bank sold California bundles of thousands of mortgage loans in the early 2000s without adequately assessing them to remove the too risky ones. Becerra said the bad investments cost the retirement systems more than $100 million.
Morgan Stanley denied the allegations in the settlement agreement.