Morgan Stanley to pay $275 million penalty for misleading RMBS investors

WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said on Thursday it had charged Morgan Stanley with misleading investors about two mortgage-backed securities it issued before the 2008 financial crisis, and that the bank would pay $275 million to settle the case, according to a press release.

The SEC found Morgan Stanley had not given investors in the securities, which were called Morgan Stanley ABS Capital I Inc. Trust 2007-NC4 and Morgan Capital I Inc. Trust 2007-HE7, the correct information about how many of the mortgages they contained were delinquent, the release said.

A lawyer for Morgan Stanley did not immediately respond to a request for comment.

(Reporting by Sarah N. Lynch; Editing by James Dalgleish)