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Morgan Stanley Sued Over Auction Rate Securities

Law360 (March 25, 2008, 12:00 AM EDT) -- Investment bank Morgan Stanley Inc. has become the latest Wall Street firm to experience the fallout of the collapse of the auction rate securities market after investors filed a lawsuit claiming the bank misled them about the risks associated with the financial instruments.

In the suit, filed Tuesday in the U.S. District Court for the Southern District of New York, shareholders claim that Morgan Stanley misstated the investment characteristics of auction rate securities.

“Morgan Stanley deceptively marketed ARS as cash alternatives to money market funds for...
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