Morgan Stanley Says Litigation with Deutsche Bank Could Cost It Around $300 Million — Filing
Suit over legacy-mortgage matters continues
Morgan Stanley said on Monday that a continuing lawsuit with Deutsche Bank over legacy mortgage matters could cost it nearly $300 million.
In April 2014, Deutsche Bank accused Morgan Stanley in a complaint of making false representations about the underlying quality of around $735 million in mortgage loans that were in a trust that a Morgan Stanley subsidiary sponsored and for which Deutsche acted as a trustee. In April, a federal judge in the Southern District of New York denied in part Morgan Stanley’s motion to dismiss the case, the filing noted.
“Based on currently available information, the company believes that it could incur a loss in this action of up to approximately $292 million, plus pre- and post-judgment interest, fees and costs,” Morgan Stanley said in a quarterly securities filing with the Securities and Exchange Commission.
Morgan Stanley didn’t provide an update on the status of a continuing investigation by New York’s attorney general. The Wall Street Journal reported last month that the bank was in talks to pay around $500 million to resolve a probe into whether it misled investors in mortgage bonds.
Source: WSJ – Morgan Stanley Says Litigation with Deutsche Bank Could Cost It Around $300 Million — Filing
