"Two international banks are suing Morgan Stanley (MS: 18.30 +0.94%) for misrepresenting the underlying collateral on
$1.2 billion in residential mortgage-backed securities.
Belgium bank Dexia filed one of the suits in New York state court, claiming Morgan Stanley sold the bank $680 million in RMBS while representing the bonds as deserving of AAA status.
While most of the bonds initially had AAA ratings, they are now well below investment grade with the majority rated C, Ca, CCC, Caa3 and C. The Belgium lender claims Morgan Stanley knew the ratings assigned to those transactions were not correct because "those ratings were bought and paid for, and were supported by false information regarding the originators' underwriting guidelines that Morgan Stanley provided."
Bayerische Landesbank, a publicly regulated German bank, filed an identical suit Thursday, claiming Morgan Stanley misrepresented the quality of collateral supporting RMBS acquired by the lender..."
at http://www.housingwire.com/2012/01/26/two-foreign-banks-sue-morgan-stanley-over-1-2-billion-in-rmbs?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29
Belgium bank Dexia filed one of the suits in New York state court, claiming Morgan Stanley sold the bank $680 million in RMBS while representing the bonds as deserving of AAA status.
While most of the bonds initially had AAA ratings, they are now well below investment grade with the majority rated C, Ca, CCC, Caa3 and C. The Belgium lender claims Morgan Stanley knew the ratings assigned to those transactions were not correct because "those ratings were bought and paid for, and were supported by false information regarding the originators' underwriting guidelines that Morgan Stanley provided."
Bayerische Landesbank, a publicly regulated German bank, filed an identical suit Thursday, claiming Morgan Stanley misrepresented the quality of collateral supporting RMBS acquired by the lender..."
at http://www.housingwire.com/2012/01/26/two-foreign-banks-sue-morgan-stanley-over-1-2-billion-in-rmbs?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+housingwire%2FuOVI+%28HousingWire%29
