Morgan Stanley said New York Attorney General Eric Schneiderman intends to sue the company, alleging it misrepresented or omitted information when underwriting 30 subprime securitizations.
The lawsuit will be brought under the state's Martin Act, New York-based Morgan Stanley said Monday in a regulatory filing. The bank is in talks with Schneiderman on a possible settlement, according to a person briefed on the discussions who asked not to be identified because the negotiations are private.
"The company does not agree with NYAG's allegations and has presented defenses to them," Morgan Stanley said in the filing.
Morgan Stanley reached an agreement with the U.S. Department of Justice last week to pay $2.6 billion to settle probes into its creation and sale of residential mortgage-backed securities.