Boston, MA 08/06/2014 (wallstreetpr) – According to reports, Morgan Stanley (NYSE:MS) made a securities filing on Tuesday in which it said,” The attorney general of California may sue us over the issue of money-losing bonds worth of $1.3 billion that we bought before global financial crisis.” The company made a 10-Q filing with the SEC (U.S. Securities and Exchange Commission) in which it stated its concern over the probably step that California AG may take in next few days.
What California Attorney General Has To Say:
According to reports published by MS,” AG of California indicated that our conduct was not enforced by the law, it somewhere violated California laws. Our conduct may result in treble damages, injunctive relief and penalties.”
In reply to the allegations put by California AG, the bank said that it did not agree with the charges put by the defense and that it would fight against it.
How did it started:
MS established an investment vehicle named Cheyne Finance LLC in 2007. After doing the initial due-diligence, the state pension fund of California (also called as CalPERS) invested $1.3 billion in this vehicle. Just after the initial investment, the entire Europe and America were surrounded by financial crisis, which didn’t leave any stone unturned to waste all the investments. Even Cheyne Finance LLC became bankrupt and could never recover after that incident.
A spokesperson of California Attorney General denied answering when reporters tried to ask him about the issue. At the same time, bank’s spokesperson also denied to reveal anything other than what was there in the report filed with U.S. Securities and Exchange Commission. According to the bank, due to another mortgage litigation issue, it’s quarterly earnings per share went down by as much as 2 cents per share. The latest recorded EPS is 92 cents per share. Even after all these negative impacts, Morgan Stanley (NYSE:MS) seems quite confident in regard with the future performance.
