SEC
Whistleblower
Attorneys

July 24, 2014

Morgan Stanley and Co. LLC, Morgan Stanley ABS Capital I Inc., Morgan Stanley Mortgage Capital Holdings LLC

Offering Fraud

SANCTION AMOUNT: $275000000

Defendants: Morgan Stanley and Co. LLC, Morgan Stanley ABS Capital I Inc., Morgan Stanley Mortgage Capital Holdings LLC

Commission found that Respondents made misleading public disclosures regarding the number of delinquent loans in two subprime RMBS transactions offered in 2007. Respondents sponsored, issued and underwrote the transactions, which were collateralized with loans with an aggregate principal value balance of over $2.5 million. The offering documents said that less than 1 percent of that was delinquent, while the actual delinquency amounts appeared to be a minimum of 4.5 percent, up to as much as 17 percent.

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