Morgan Stanley Sued Over $140 Million in RMBS

Orrick - Finance 20/20
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On August 29, Bank Hapoalim B.M. filed a summons with notice in New York state court against four Morgan Stanley entities. Bank Hapoalim alleges that offering materials accompanying the sale of eight RMBS purchased for a total of $140,507,000 between September 2006 and July 2007 contained fraudulent misrepresentations that induced the purchases. Bank Hapoalim brings claims for violation of the Securities Act, common law fraud, aiding and abetting fraud, negligent misrepresentation, and breach of contract. In particular, Bank Hapoalim alleges that the defendants made material misrepresentations and omissions concerning the underlying guidelines used to originate the loans, the statistical characteristics of the loans, including loan-to-value ratios, combined loan-to-value ratios, and owner-occupancy status, the legal validity of the trusts and their entitlement to receive payments on the loans, and the credit ratings assigned to the RMBS. Summons.

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