Morgan Stanley 2014 Annual Report Download - page 46

October 16, 2013, the court granted the defendants’ motion to dismiss the amended complaint. On November 18,
2013, plaintiffs filed a notice of appeal of the dismissal. Plaintiffs also filed a motion to renew their opposition to
defendants’ motion to dismiss, which the court denied on June 23, 2014. On July 16, 2014, plaintiffs filed a
notice of appeal of that decision, which has been consolidated with the appeal of the motion to dismiss.
On April 25, 2012, The Prudential Insurance Company of America and certain affiliates filed a complaint against
the Company and certain affiliates in the Superior Court of the State of New Jersey, styled The Prudential
Insurance Company of America, et al. v. Morgan Stanley, et al. On October 16, 2012, plaintiffs filed an amended
complaint. The amended complaint alleges that defendants made untrue statements and material omissions in
connection with the sale to plaintiffs of certain mortgage pass-through certificates backed by securitization trusts
containing residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold
by the Company is approximately $1.073 billion. The amended complaint raises claims under the New Jersey
Uniform Securities Law, as well as common law claims of negligent misrepresentation, fraud, fraudulent
inducement, equitable fraud, aiding and abetting fraud, and violations of the New Jersey RICO statute, and includes
a claim for treble damages. On March 15, 2013, the court denied the defendants’ motion to dismiss the amended
complaint. On January 2, 2015, the court denied defendants’ renewed motion to dismiss the amended complaint.
On August 7, 2012, U.S. Bank, in its capacity as Trustee, filed a complaint on behalf of Morgan Stanley
Mortgage Loan Trust 2006-4SL and Mortgage Pass-Through Certificates, Series 2006-4SL (together, the
“Trust”) against the Company. The matter is styled Morgan Stanley Mortgage Loan Trust 2006-4SL, et al. v.
Morgan Stanley Mortgage Capital Inc. and is pending in the Supreme Court of NY. The complaint asserts claims
for breach of contract and alleges, among other things, that the loans in the Trust, which had an original principal
balance of approximately $303 million, breached various representations and warranties. The complaint seeks,
among other relief, rescission of the mortgage loan purchase agreement underlying the transaction, specific
performance and unspecified damages and interest. On August 8, 2014, the court granted in part and denied in
part the defendants’ motion to dismiss.
On August 8, 2012, U.S. Bank, in its capacity as Trustee, filed a complaint on behalf of Morgan Stanley
Mortgage Loan Trust 2006-14SL, Mortgage Pass-Through Certificates, Series 2006-14SL, Morgan Stanley
Mortgage Loan Trust 2007-4SL and Mortgage Pass-Through Certificates, Series 2007-4SL against the Company.
The complaint is styled Morgan Stanley Mortgage Loan Trust 2006-14SL, et al. v. Morgan Stanley Mortgage
Capital Holdings LLC, as successor in interest to Morgan Stanley Mortgage Capital Inc. and is pending in the
Supreme Court of NY. The complaint asserts claims for breach of contract and alleges, among other things, that
the loans in the trusts, which had original principal balances of approximately $354 million and $305 million
respectively, breached various representations and warranties. The complaint seeks, among other relief,
rescission of the mortgage loan purchase agreements underlying the transactions, specific performance and
unspecified damages and interest. On October 9, 2012, the Company filed a motion to dismiss the complaint. On
August 16, 2013, the court granted in part and denied in part the Company’s motion to dismiss the complaint. On
September 26, 2013, and October 7, 2013, the Company and the plaintiffs, respectively, filed notices of appeal
with respect to the court’s August 16, 2013 decision.
On August 10, 2012, the FDIC, as receiver for Colonial Bank, filed a complaint against the Company and other
defendants in the Circuit Court of Montgomery, Alabama styled Federal Deposit Insurance Corporation as
Receiver for Colonial Bank v. Citigroup Mortgage Loan Trust Inc. et al. The plaintiff filed an amended
complaint on September 13, 2013. The complaint alleges that the Company made untrue statements and material
omissions in connection with the sale to Colonial Bank of a mortgage pass-through certificate backed by a
securitization trust containing residential loans. The complaint asserts claims under federal securities law and the
Alabama Securities Act, and seeks, among other things, compensatory damages. The total amount of the
certificate allegedly sponsored, underwritten and/or sold by the Company to Colonial Bank was approximately
$65 million. On November 12, 2013, the defendants filed a motion to dismiss the amended complaint, which was
denied on April 10, 2014.
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