Irish Nuns Sue Morgan Stanley over Bond Deal
CNBC EMEA Head of News
A group of nuns from Ireland are suing Morgan Stanley, alleging improper actions by the investment bank that led them to lose at least 5 million euros ($6.4 million), about 80 percent of their total investment, a filing by Stuarts Law showed.
The claim, titled "The Sisters of Jesus and Mary versus Morgan Stanley", is related to bond investments linked to Dresdner Bank debt.
The filing claims Morgan Stanley’s Special Purpose Vehicle (SPV) Saturn's Investment Europe "deliberately or carelessly failed to redeem the notes" following their downgrading in January 2009.
According to the filing, The Sisters of Charity of Jesus and Mary claim the SPV then waited until the price of the bond had risen in June 2009 to redeem the note and securing "Morgan Stanley a profit of at least $11.2 million … by way of a termination of payment."
The nuns are seeking damages of 15 million euros. Morgan Stanleydeclined to comment on the case.