Morgan Stanley Board Wins Round In ARS Suit

Law360, New York (June 25, 2009, 12:00 AM EDT) -- A federal judge has temporarily halted proceedings over shareholder derivative allegations that Morgan Stanley manipulated the market for auction rate securities, holding that the broker-dealer’s board of directors is entitled to consider investigating the claims before the onset of litigation.

Dealing a setback to shareholders Tuesday, Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York ruled that the plaintiffs are not exempted from first making a demand on Morgan Stanley’s board, affording the defendants the chance to conduct an...
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