FDIC's Suit Against Morgan Stanley Sent Back To State Court

Law360, New York (February 8, 2012, 7:42 PM EST) -- A Texas federal judge on Wednesday remanded to state court a suit by Franklin Bank SSB receiver Federal Deposit Insurance Corp. over Morgan Stanley & Co. LLC's allegedly misleading statements in its $35 million sale of residential mortgage-backed securities to Franklin Bank in 2007.

U.S. District Judge Nancy F. Atlas remanded the case to Texas court, finding that Morgan Stanley had not adequately supported its argument that the FDIC's claims under the Securities and Exchange Act of 1993 were "baseless," after the FDIC claimed that Morgan...
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