Morgan Stanley’s Motion to Dismiss $757 Million RMBS Suit Denied in Part

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On July 13, Justice Eileen Bransten of the New York Supreme Court denied Morgan Stanley’s motion to dismiss MetLife’s common law fraud and fraudulent inducement claims. MetLife alleges that Morgan Stanley knowingly misrepresented the quality of over $757 million RMBS that it underwrote or sponsored. The court held that MetLife sufficiently alleged reasonable reliance, a material misrepresentation, scienter and loss causation. However, Justice Bransten granted the motion to dismiss as to claims brought by the Connecticut subsidiary of MetLife, finding the claims barred by Connecticut’s three-year statute of repose for fraud claims. Decision.