Ambac Financial Group, the holding company for bankrupt bond insurer Ambac Assurance, has agreed to settle a lawsuit claiming it misled shareholders about the risks the company took on insuring subprime mortgages.

The holding company will pay out $27.1 million to plaintiffs, which includes $2.5 million Ambac had already placed in an escrow account, according to court documents.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.