Losses Prompt ERISA Suit Against Morgan Stanley

Law360, New York (January 23, 2008, 12:00 AM EST) -- Morgan Stanley was hit with a proposed class action on Friday by an employee who alleges that the firm encouraged employees to invest pensions in its own stock despite its risky exposure to subprime mortgage debt.

The suit was filed by Gregory Major, a Morgan Stanley employee, who accused the company of violating its duties under the Employee Retirement Income Security Act by misleading employees into thinking that investing their pension contributions in Morgan Stanley stock was safe.

“This action alleges that the fiduciaries of the...
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