Morgan Stanley (MS) may not have issued the bond ratings that prompted investors to support notes backed by subprime mortgages, but they can still be held accountable for influencing the final ratings, a New York Judge ruled.
Bloomberg reports that U.S. District Judge Shira Scheindlin out of Manhattan held that Morgan Stanley cannot escape a suit over MBS bond ratings by saying the information came from ratings giants Moody’s Corp. and S&P.
The judge said the omission of nonpublic facts on the investment bank’s part could have informed the inflated ratings.
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