Morgan Stanley has agreed to pay $2.6 billion to resolve a federal probe into crisis-era mortgage-backed securities, the bank disclosed in a regulatory filing Wednesday.
The bank said that it was increasing its legal reserves to $2.8 billion and decreased its stated earnings.
The agreement with the Justice Department was made in principle but still awaiting legal documentation, the bank said.
Wednesday’s announcement is the latest in a long string of settlements relating to faulty mortgage securities sold during the run-up to the collapse of the housing bubble and the financial crisis in 2008.
For its part, Morgan Stanley has already paid the Federal Housing Finance Agency $1.25 billion for securities sold to Fannie Mae and Freddie Mac. It also has reached a smaller settlement with the Securities and Exchange Commission.
The news was first reported Wednesday by Bloomberg.
The Justice Department has touted the billions recouped in settlements with banks related to the crisis as evidence of its tough stance against financial crimes.
Critics, however, have faulted the government for failing to prosecute individual bank executives.
Eric Holder, the attorney general for all of President Obama’s tenure, is likely to leave office in the next several weeks. His nominated replacement, U.S. Attorney Loretta Lynch, is expected to gain Senate approval soon.
Holder said earlier in February that he had given prosecutors a 90-day deadline to bring cases against financial executives involved in fraud related to the housing crisis.
