Breaking News

Euro Area Sept. Manufacturing PMI Falls to 50.3 vs. Est. 50.5
Tweet TWEET

Bank Hapoalim Sues Morgan Stanley Over Securities

Morgan Stanley was sued by Bank Hapoalim BM (POLI), Israel’s second-biggest bank, in New York state court over $140.5 million in residential mortgage-backed securities.

Bank Hapoalim seeks damages for claims including common-law fraud, fraudulent inducement and negligent misrepresentation, according to documents filed today in New York State Supreme Court in Manhattan. The bank accuses New York-based Morgan Stanley of making material misrepresentations in the offering materials for the investments.

Bank Hapoalim, based in Tel Aviv, has sued other banks in the same court over mortgage-backed securities during the past year, including JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets, and Bank of America Corp., the second-biggest U.S. lender.

Pools of home loans securitized into bonds were a central part of the housing bubble that helped send the U.S. into the biggest recession since the 1930s. The housing market collapsed, and the crisis swept up lenders and investment banks as the market for the securities evaporated.

Lauren Onis, a spokeswoman for Morgan Stanley (MS), declined to immediately comment on the lawsuit.

The case is Bank Hapoalim BM v. JPMorgan Chase & Co., 653036/2012, New York State Supreme Court (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.