Morgan Stanley Pays $102mm to Settle Mass. Probe Related to New Century Lending Practices
June 24, 2010 - Marketwatch.com reports that Morgan Stanley & Co. agreed to pay $102 million to settle allegations that it aided and abetted subprime lender New Century Financial Corp. in taking advantage of consumers. Massachusetts Attorney General Martha Coakley's office announced the settlement on Thursday. According to its press release, the AG "alleged that Morgan entered the subprime arena in Massachusetts by offering funding to retail lenders that specialized in loans to less-qualified borrowers. Morgan provided billions of dollars to subprime lender New Century, which used Morgan funds to target lower-income borrowers and lure them into loans that consumers predictably could not afford to pay...Some Morgan Stanley investment bankers referred to New Century as Morgan’s 'partner' in the subprime lending business."
