CDIB's $228M Securities Suit V. Morgan Stanley Survives

Law360, New York (July 7, 2011, 3:55 PM EDT) -- A New York state appeals court ruled Thursday that China Development Industrial Bank's lawsuit over allegations it lost $228 million in a complex securities deal orchestrated by Morgan Stanley can proceed.

The Taiwanese bank's complaint sufficiently alleged that Morgan Stanley had "peculiar knowledge" about the underlying alleged fraud that CBIB could not have uncovered in its own investigation, a five-judge appeals panel ruled in upholding a lower court's determination.

CDIB alleges that Morgan Stanely conspired with ratings agencies to structure the deal and give it inflated...
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