Morgan Stanley Wins Dismissal of Misselling Lawsuit in U.S.Andrea Tan
Morgan Stanley won a bid to dismiss a lawsuit by Singapore’s Hong Leong Finance Ltd. over claims the New York-based bank deceptively sold notes designed to fail.
U.S. District Judge Jesse Furman in Manhattan yesterday threw out Hong Leong’s claim, ruling there wasn’t sufficient connection between Morgan Stanley’s conduct in the U.S. and the allegedly infringing activities in Singapore.
Hong Leong Finance had accused Morgan Stanley of persuading it to sell so-called Pinnacle notes to its middle and working-class Singaporean customers by emphasizing they were “conservative” and “low-risk products.” The Singapore firm sold $72.4 million worth of the notes, which later failed.
The Monetary Authority of Singapore ordered Hong Leong Finance to repay more than $32 million to the investors, as of March, the judge wrote.
Harriet Ngan, a Hong Kong-based spokeswoman at Morgan Stanley, didn’t immediately respond to an e-mailed request for comment on the ruling. Louisa Cheong, a spokeswoman at Hong Leong Finance, also didn’t immediately respond.
Furman ruled last week that Morgan Stanley must face a separate lawsuit by a group of Singapore plaintiffs, who claimed they lost $154.7 million in a “bait and switch” scheme on another group of Pinnacle notes designed to benefit Morgan Stanley at the expense of the customers.
The case is Hong Leong Finance Ltd. v. Pinnacle Performance Ltd., 12-cv-6010, U.S. District Court, Southern District of New York (Manhattan).