ACLU Says Morgan Stanley Pushed Risky Mortgages On Blacks

Law360, New York (October 15, 2012, 2:10 PM EDT) -- Morgan Stanley violated federal fair lending laws by pressuring a defunct subprime lender to give risky loans to black borrowers and profiting off the securitization of those loans, according to a putative class action launched Monday by the American Civil Liberties Union.

In a complaint filed in New York federal court, the ACLU accuses Morgan Stanley of pushing subprime lender New Century Mortgage Corp. — from whom the bank bought billions of dollars worth of loans and packaged into mortgage-backed securities — to make high-risk, high-cost...
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