GLOBAL – The €270bn civil service scheme ABP has sued Morgan Stanley for fraud over residential mortgage-backed securities (RMBS) acquired in 2006-07.
In the lawsuit – brought before the New York State Supreme Court – ABP claims that, based on material misrepresentations and omissions, it purchased securities that were far riskier than had been represented.
The lawsuit said: "The securities backed by mortgage loans were worth significantly less than had been represented, and had been made to borrowers who were much less creditworthy than had been represented."
The securities acquired by ABP were collateralised against mortgages originated and/or acquired by Morgan Stanley-affiliated entities and various third-party originators, according to the pension fund.
ABP has now filed lawsuits against Goldman Sachs, Credit Suisse, Deutsche Bank and JP Morgan Chase for similar "material misrepresentations and omissions".
A spokesman at ABP declined to provide details on the amount of RMBS purchased from Morgan Stanley, or the scale of the claimed damages.
Morgan Stanley has declined to comment.