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Morgan Stanley Settles Allegations It Led Firm To Ruin

Law360 (November 21, 2006, 12:00 AM EST) -- A judge has approved a $95 million settlement that will resolve allegations that Morgan Stanley breached its fiduciary duty and led to the collapse of General American Mutual Holding Co.

The lawsuit brought in St. Louis City Circuit Court in 2004 alleged that Morgan Stanley encouraged General American to keep selling a product it knew could put General American at risk.

The settlement money will go to about 302,000 policyholders, said Albert Riederer, special deputy liquidator for General American.

The policyholders have already received about $1.2...
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