Feds Eyeing Morgan Stanley 'Dead Presidents': Report

Law360, New York (May 12, 2010, 1:58 PM EDT) -- Federal prosecutors are reportedly investigating whether Morgan Stanley misled investors in two mortgage derivative deals named for dead U.S. presidents and then proceeded to bet against the deals.

The investigation, being led by the U.S. attorney's office for the Southern District of New York, represents a broadening of the federal government's inquiry into Wall Street practices in the run-up to the 2008 financial crisis, according to a report in the Wall Street Journal on Wednesday.

Morgan Stanley arranged and marketed to investors collateralized debt obligations while...
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