MBIA Sues Morgan Stanley Over Mortgage-Backed Debt
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MBIA Insurance Corp. sued Morgan Stanley over allegations the securities firm “fraudulently induced” the insurer to issue policies covering $223.2 million in mortgage-backed securities.
The bond-insuring unit of MBIA Inc. claims Morgan Stanley and one of its units failed to disclose that most of the 5,000 underlying loans didn’t meet the underwriting guidelines of the firm or the originators, according to a complaint filed yesterday in New York state court in White Plains.