MBIA will pay $75 million for trying to cover up close to $170 million in losses through a fraudulent reinsurance scheme.

Under an agreement announced today, the Armonk, N.Y.-based bond insurer will pay a $50 million penalty to the Securities and Exchange Commission, $10 million to investors and $15 million in penalties to the state of New York. The case also involves the New York Attorney General's office and the New York State Insurance Department.

The $50 million to the SEC will be placed in a Fair Fund to be paid to investors.

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