By Jonathan Stempel
NEW YORK (Reuters) – Morgan Stanley (MS.N) has been sued by a Virgin Islands pension fund that accused the Wall Street bank of defrauding investors by marketing $1.2 billion (753 million pounds) of risky mortgage-related notes that it expected to fail.
The lawsuit filed December 24 in Manhattan federal court said Morgan Stanley collaborated with credit rating agencies Moody’s Investors Service and Standard & Poor’s to obtain “triple-A” ratings for notes marketed in 2007 as part of a collateralized debt obligation (CDO) known as Libertas.
See details of the case Employees’ Retirement System of the Government of the Virgin Islands v. Morgan Stanley & Co et al, U.S. District Court, Southern District of New York, No. 09-10532.
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