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Morgan Stanley Sued by Allstate on Mortgage Claims

Morgan Stanley was sued for fraud by Allstate Insurance Co. over residential mortgage-backed securities in which the insurer invested, according to a complaint filed in New York.

Allstate purchased more than $104 million in Morgan Stanley residential mortgage-backed securities in six offerings between 2005 and 2007, based on registration statements, prospectuses and other documents, as well as the “central role” that Morgan Stanley played in creating and selling the securities, it said in the suit filed yesterday in New York state Supreme Court.