Central Laborers' Pension Fund, Jacksonville, Ill., filed a shareholder lawsuit in federal court today against Morgan Stanley's board of directors, alleging "years of gross mismanagement" and improper compensation packages for former top executives, according to court documents. Former Morgan Stanley CEO Philip Purcell, former co-President Stephen Crawford, and former General Counsel Donald Kempf are also named as defendants in the shareholder derivative action, filed to protect all shareholders from improper management.
The $850 million pension fund is a Morgan Stanley shareholder, but it was not immediately clear how many Morgan Stanley shares the pension fund holds. The law firm of Lerach Coughlin Stoia Geller Rudman & Robbins filed the suit in the U.S. District Court in Manhattan on behalf of the pension fund.
William Lerach, chairman of the law firm, said the suit seeks monetary damages and refund of the compensation paid to the former executives. A specific monetary value for claims has not yet been determined, Mr. Lerach said. The lawsuit also seeks corporate governance reforms at Morgan Stanley.
Andrea Slattery, Morgan Stanley spokeswoman, could not comment on the matter by press time.