Judge Revives Claims Over Failed $9B Morgan Stanley SIV

By Beth Winegarner (November 7, 2012, 9:21 PM EST) -- A New York federal judge said Wednesday she would reconsider fraud claims brought by SEI Investment Strategies and Bank of N.T. Butterfield & Son against Morgan Stanley over a failed $9 billion structured investment vehicle, saying she overlooked evidence giving them a right to sue.

A bevy of investors led by Abu Dhabi Commercial Bank is suing Morgan Stanley and several rating services for constructing the investment vehicle — dubbed Cheyne and said to be the largest of its kind at the time — then allegedly falsely inflating Cheyne's ratings. In August, Judge Shira Scheindlin dismissed SEI's fraud claims, saying it...

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