Morgan Stanley was sued by DZ Bank AG, a clearinghouse for cooperative banks in Germany, over claims the investment bank misrepresented and omitted information about $694 million in mortgage-backed securities.
DZ Bank, based in Frankfurt, filed the suit today in New York State Supreme Court in Manhattan. It has taken similar actions in the same court against other banks this year, including JPMorgan Chase & Co., HSBC Holdings Plc, UBS AG and Goldman Sachs Group Inc.
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.
Morgan Stanley’s media office didn’t immediately return an e-mail seeking comment on the lawsuit.
DZ Bank is one of two clearing organizations for Germany’s cooperative banks, allowing it to provide structured products directly to more than 900 local lenders.
The case is Deutsche Zentral Genossenschaftsbank AG v. Morgan Stanley, 654035/2012, New York State Supreme Court, New York County (Manhattan).