Morgan Stanley profits hit by mortgage lawsuits
Investment bank sets aside $1.2 billion to pay court costs
For investment bank Morgan Stanley (MS), the credit crisis is still a huge problem.
The fourth-quarter results include $1.2 billion of "additions to legal reserves for mortgage-related matters, specifically litigation and investigations related to residential mortgage-backed securities and the credit crisis."
"Our fourth-quarter results demonstrated the consistency embedded in our business model, as revenues increased year-over-year in all three of our business segments," CEO James Gorman said in a statement. "Importantly, we are continuing to address many of the legal issues from the financial crisis."
Morgan Stanley reported fourth-quarter profits of $192 million, seven cents a share, down from $661 million, or 33 cents, from the same time last year.