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Mutual Funds Hit Morgan Stanley With $122M MBS Suit

Law360, New York (May 3, 2012, 1:57 PM EDT) -- Mutual funds run by Shay Assets Management Inc. targeted another financial giant over residential mortgage-backed securities in New York state court on Tuesday, claiming Morgan Stanley & Co. LLC fraudulently securitized and sold more than $122 million of the risky securities.

The suit, filed by the Assets Management Fund institutional mutual funds, claims Morgan Stanley made several misrepresentations and omissions regarding the securitization and sale of the mortgage-backed securities, some of which the plaintiffs have already sold at a loss. The suit asserts claims of fraud,...
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