Posted on 03/07/2013 12:48:24 PM PST by mgist
Judge dismisses some negligent claims vs Morgan Stanley
By Bernard Vaughan
NEW YORK (Reuters) - Morgan Stanley won a dismissal of some negligent misrepresentation claims in a lawsuit over its role in the failed Cheyne structured investment vehicle.
The plaintiffs, including N.T. Butterfield & Son Ltd, invested in the Cheyne SIV and are seeking to recover losses from the liquidation of notes it issued between October 2004 and October 2007.
The plaintiffs initiated the lawsuit in 2008 against numerous defendants, including Morgan Stanley and ratings agencies Moody's Investors Service and Standard & Poor's. They accused Morgan Stanley specifically of breaches of fiduciary duties, breaches of contract, unjust enrichment and negligent misrepresentation, among other claims, according to the complaint.
Morgan Stanley was a structurer and adviser on the SIV, which involved negotiating with ratings agencies and marketing the notes to investors, according to the opinion.
Morgan Stanley asked for summary judgment on negligent misrepresentation claims, arguing that the plaintiffs could not establish that they had a special relationship with the bank required under New York law for such a claim.
In an opinion issued Wednesday, U.S. District Judge Shira Scheindlin granted Morgan Stanley's motion with respect to several plaintiffs, including SEI Investment Strategies, N.T. Butterfield & Son Ltd and King County, Washington.
"When there is no special relationship, plaintiffs cannot establish the existence of a duty to impart correct information and their claim necessarily fails," Scheindlin wrote.
The judge, however, denied the bank's motion with respect to several other plaintiffs, including Commerzbank, Gulf International Bank and Bank Hapoalim B.M.
These plaintiffs, Scheindlin wrote, showed that "Morgan Stanley affirmatively solicited their investment, made numerous in-person, email and telephone communications over significant periods of time," among other evidence of a special relationship.
Scheindlin reserved ruling on remaining plaintiffs' negligent misrepresentation claims for a second phase of the trial.
The case is Abu Dhabi Commercial Bank v. Morgan Stanley & Co, U.S. District Court, Southern District of New York, No. 08-07508.
For the plaintiffs: Daniel Drosman and Darryl Alvarado of Robbins Geller Rudman & Dowd.
For Morgan Stanley: Greg Andres of Davis Polk & Wardwell.
That's not the way I read it. If there is no "special relationship," there's no way to establish negligence (with regard to whether MS had a duty to disclose).
How can they not have a duty to impart correct information?
I was scammed by Morgan Stanley. They are terrible.
Whistleblower files federal lawsuit against Morgan Stanley, FINRA
By Ashley Lau | Reuters – Fri, Feb 22, 2013.
NEW YORK (Reuters) - A former Morgan Stanley broker who tried to blow the whistle on what he called unethical sales practices, and was later ordered to pay $1.2 million following his departure, is seeking his day in federal court.
Mark Mensack filed a lawsuit against Morgan Stanley and Wall Street’s top watchdog in a New Jersey federal district court on Friday, accusing the firm of perjury, among other claims. Mensack also found fault with the industry’s arbitration hearing process that resulted in the award against him.
“That needs to be brought to light,” Mensack said in an interview on Friday, referring to his claim that Morgan Stanley committed perjury. Mensack said his attorney proved that key evidence was fabricated against him during the hearing.
When Mensack sought to review the testimony of the arbitration hearing in hopes of vacating the award, he found that roughly eight hours of the testimony were “destroyed, never recorded or were otherwise missing and unavailable.”
“It’s an indication of injustice in the system,” said Mensack, who is now seeking a trial by jury.
You could be right, I’m not a lawyer. I know they are scam artists though.
I used to think the same as you, but now I think they are all corrupt. Billions in Tarp funds? They all have offshore accounts, and are money laundering for Obama as far as I’m concerned.
Perhaps the banks got a good deal, perhaps the govt deal makers are numbskulls, but this is what happens when govt interferes with capitalism. And just because someone comes up with a way to make a ton of money does not make them a crook or corrupt. As for overseas accounts and the like, not sure what that means, but I'm fairly sure it isn't to launder money for Obama.
Perhaps the banks got a good deal, perhaps the govt deal makers are numbskulls, but this is what happens when govt interferes with capitalism. And just because someone comes up with a way to make a ton of money does not make them a crook or corrupt. As for overseas accounts and the like, not sure what that means, but I'm fairly sure it isn't to launder money for Obama.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.