Morgan Stanley made a $95 million settlement stemming from a lawsuit that claimed the firm violated U.S. securities law in its mortgage-backed securities offerings in 2006 and 2007.
The settlement was announced Monday in the U.S. District Court in New York.
The lawsuit had been consolidated from two separate lawsuits in 2008 and 2009 and was led by the $25.1 billion Mississippi Public Employees’ Retirement System, Jackson, and $13.4 billion West Virginia Investment Management Board, Charleston.
According to the stipulation and agreement of settlement filed and released on Monday, the initial lawsuit in December 2008 “asserted claims under the Securities Act of 1933 (‘Securities Act’) on behalf of all persons or entities who purchased or otherwise acquired mortgage pass-through certificates in 13 offerings pursuant or traceable to Morgan Stanley Capital I Inc.’s March 14, 2006, Pre-Effective Amendment No. 2 to Form S-3 Registration Statement and its accompanying prospectuses and prospectus supplements.”
While the settlement is for the entire class, the specific claims by West Virginia and some other plaintiffs had been dismissed by the District Court but are subject to appeal.
David R. Stickney, co-lead counsel for the plaintiffs and an attorney at Bernstein Litowitz Berger & Grossmann, declined to comment. Pat Robertson, Mississippi PERS executive director, was not available by press time; Craig Slaughter, WVIMB executive director and CEO, and Mark Lake, Morgan Stanley spokesman, did not return phone calls by press time.
