On October 16, Justice Eileen Bransten of the Supreme Court for the State of New York dismissed a suit by FSA Asset Management LLC (FSAM) and Dexia SA/NV (with two related entities, Dexia) alleging fraud by Morgan Stanley in connection with the sale of $626 million in RMBS. FSAM originally purchased the RMBS from Morgan Stanley in 2006 and 2007, but in 2009, assigned the securities to Dexia in a put option transaction. Plaintiffs alleged that Morgan Stanley misrepresented the underwriting standards and collateral attributes of the mortgage loans underlying the securities and brought claims for fraud, aiding and abetting fraud and fraudulent inducement. Justice Bransten held that Dexia lacked standing to bring the claims because the put option transaction assigned only ownership and contractual rights in respect of the RMBS, not claims sounding in tort. The court further held that FSAM had not suffered damages because it had received full face value for the securities from Dexia. Decision.