California AG sues Morgan Stanley over complex investments
SAN FRANCISCO (AP) — Attorney General Kamala D. Harris has filed a lawsuit against investment bank Morgan Stanley for misrepresentations of complex investments.
The investments included residential mortgage-backed securities, in which large pools of home loans were packaged together and sold to investors.
Harris says the misrepresentations contributed to the global financial crisis and to major losses by investors including California's public pension funds, which are responsible for the retirement security of state peace officers, firefighters, teachers, and other public employees.
The complaint was filed Friday in San Francisco Superior Court. Harris alleges that Morgan Stanley violated state laws by concealing or understating the risks of intricate investments involving large numbers of underlying loans or other assets.
Morgan Stanley spokesman Mark Lake said in a statement that the company does not believe the case has merit and it intends to defend it vigorously.