Rejecting a motion for dismissal, a federal judge ruled yesterday that Morgan Stanley along with two of its credit ratings agencies must defend themselves against accusations of defrauding investors, according to Reuters. Morgan Stanley, along with agencies Moody’s and Standard & Poor’s, are accused of hiding the risks related to failed investments connected with subprime mortgage packages. The plaintiffs, Abu Dhabi Commercial Bank and King County in Washington state, say that both the financial firm and its raters abetted the positive marketing of an investment vehicle that went belly-up in August 2007.
Judge To Morgan Stanley: Defend Fraud Accusations
A suit against Morgan Stanley and two of its ratings agencies will proceed, thanks to the ruling of the presiding judge in the case.
September 3, 2009