Discovery Halted In FDIC's Morgan Stanley RMBS Suit

Law360, Chicago (October 30, 2012, 4:59 PM EDT) -- A Texas federal judge granted Morgan Stanley's bid Tuesday to stay discovery in the Federal Deposit Insurance Corp.'s suit over its sale of $67 million in residential mortgage-backed securities to failed Franklin Bank SSB, finding that a fight over the correct forum should be resolved first.

Though U.S. Magistrate Judge Stephen Wm. Smith rejected Morgan Stanley's argument that a discovery stay was required under the Private Securities Litigation Reform Act, he issued one based on the court's own discretion in light of Morgan Stanley's pending bid...
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