CDIB Accuses Morgan Stanley Of Subprime CDO Fraud

Law360, New York (September 14, 2010, 6:48 PM EDT) -- China Development Industrial Bank Inc. has launched a new suit against Morgan Stanley & Co. Inc. alleging the bank defrauded investors in its Stack 2006-1 collateralized debt obligation, which was tied to subprime mortgage assets.

The Taiwanese bank filed its complaint for fraud and other violations of New York state law in the Supreme Court of the State of New York, County of New York, on Tuesday.

The complaint alleges Morgan Stanley made bad investments tied to U.S. subprime mortgage bonds and then dumped its toxic...
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