As head of securities products, Mr. Phillips directed the unit of Morgan Stanley
that packaged and sold billions of dollars of home loan bundles to Fannie Mae, Freddie Mac and other investors.
When those loans blew up and the government sued Morgan Stanley, Mr. Phillips was a named defendant in the initial case — a case
that resulted in the firm paying a $1.25 billion settlement.
In 2011, the Federal Housing Finance Agency, the overseer of Fannie
and Freddie, sued Morgan Stanley on their behalf, naming Mr. Phillips as a defendant.
Well after Mr. Phillips had left Morgan Stanley, the firm’s shareholders paid dearly for the New Century relationship.
Another financial crisis lawsuit filed against Morgan Stanley describes Mr. Phillips’s role at the firm, detailing
his close association with New Century Financial, one of the wildest of the Wild West subprime lenders.
