Morgan Stanley announced earlier this week that it will pay $2.6 billion to settle charges with the federal government over its role in the mortgage bubble crisis throughout 2008 into 2009.
The charges involve the sale of mortgage bonds prior to the financial crisis and are said to reduce its 2014 profit by over half of its total amount, the Huffington Post reports.
Other Wall Street banks including Bank of America, JPMorgan Chase and Citigroup have also reached settlements with the federal government for similar claims.
Although Morgan Stanley's deal has not been solidified, the New York City-based bank is said to increase its legal reserves by $2.8 billion as a result of the charges, making its full-year operating profit decrease by $1.35 per share, The State reports.
Last year, the company also reached an agreement with government officials over mortgage crisis charges: officials paid $1.25 billion to the Federal Housing Finance Authority for government-sponsored mortgages sold to Freddie Mac and Fannie Mae.
Morgan Stanley also recently advised employees that Doug Ketterer, head of strategy at the company's wealth-management division, will be retiring.
"Doug has been an important contributor throughout his tenure at the firm and has served as a leader and dedicated culture carrier of Morgan Stanley," wrote Morgan Stanley official Greg Fleming, according to the Wall Street Journal.
