Morgan Stanley May Settle Nuns U.K. Bond Lawsuit
(Corrects to remove claims withdrawn by defendants in fourth and fifth paragraphs of story published June 18.)
Morgan Stanley (MS) is close to a settlement with two groups of nuns, an Irish charity for veterinarians and 129 private investors who say they lost $20 million in a bond sale.
Andrew Sutcliffe, a lawyer representing the private investors, told a U.K. court today that a settlement is close to being reached by Irish investors who said the investment bank failed to sell notes soon enough after they were downgraded. No figures were discussed at the court hearing in London.
The Sisters of Charity of Jesus and Mary, the Holy Faith Sisters, the Irish Veterinary Benevolent Fund and individual investors in 2010 sued Morgan Stanley and Saturns Investments Europe Plc, a special-purpose vehicle set up by the New York- based bank.
The investors bought the notes through the Irish brokerage firm Bloxham, which has since been liquidated, in 2005, according to documents filed at the U.K. high court.
Investors lost more than $20 million as a result and Morgan Stanley made 10 million euros, the investors said in court documents filed at the U.K. court.
The lawsuit is “speculative and without merit,” Morgan Stanley and the other defendants said in court documents.
Alon Riza, a spokesman for Stewarts Law LLP which represents the 132 investors, didn’t immediately respond to requests for comment. Michael Wang, a spokesman for Morgan Stanley in London, declined to comment.
Bloxham appointed a provisional liquidator at the end of May after it suspended operations amid unrelated probe by Ireland’s central bank into accounting irregularities.
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