Morgan Stanley 2015 Annual Report Download - page 37

On January 25, 2012, Dexia SA/NV and certain of its affiliated entities filed a complaint against the Company in the
Supreme Court of NY, styled Dexia SA/NV et al. v. Morgan Stanley, et al. An amended complaint was filed on May 24, 2012
and alleged that defendants made untrue statements and material omissions in the sale to plaintiffs of certain mortgage pass-
through certificates backed by securitization trusts containing residential mortgage loans. The total amount of certificates
allegedly issued by the Company and/or sold to plaintiffs by the Company was approximately $626 million. On October 16,
2013, the court granted the defendants’ motion to dismiss the amended complaint. The dismissal was affirmed on appeal on
January 12, 2016.
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 alleged 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 was 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 January 8, 2016, the parties reached an agreement to settle the
litigation.
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. On January 15, 2014, the FDIC, as receiver for United Western Bank filed a
complaint against the Company and others in the District Court of the State of Colorado, styled Federal Deposit Insurance
Corporation, as Receiver for United Western Bank v. Banc of America Funding Corp., et al. The complaints in those cases
asserted that the Company made untrue statements and material omissions in connection with the sale of mortgage pass-
through certificates purchased by Colonial Bank and United Western Bank, respectively. On January 28, 2016, the parties
reached an agreement to settle both actions.
On August 5, 2013, Landesbank Baden-Württemberg and two affiliates filed a complaint against the Company and certain
affiliates in the Supreme Court of NY, styled Landesbank Baden-Württemberg et al. v. Morgan Stanley et al. The complaint
alleged that defendants made material misrepresentations and omissions in 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 to plaintiffs was approximately $50 million. On January 20,
2016, the parties reached an agreement in principle to settle the litigation.
On August 16, 2013, the plaintiff in National Credit Union Administration Board v. Morgan Stanley & Co. Incorporated, et al.
filed a complaint against the Company and certain affiliates in the United States District Court for the District of Kansas. On
September 23, 2013, the plaintiff in National Credit Union Administration Board v. Morgan Stanley & Co. Inc., et al. filed a
complaint against the Company and certain affiliates in the SDNY. The complaints alleged that defendants made untrue
statements of material fact or omitted to state material facts in the sale to the plaintiff of certain mortgage pass-through
certificates issued by securitization trusts containing residential mortgage loans. The total amount of certificates allegedly
sponsored, underwritten and/or sold by the Company to plaintiffs in the matters was approximately $567 million and $417
million, respectively. The complaints alleged violations of federal and various state securities laws and sought, among other
things, rescissionary and compensatory damages. On November 23, 2015, the parties reached an agreement to settle both
matters.
On September 16, 2014, the Virginia Attorney General’s Office filed a civil lawsuit, styled Commonwealth of Virginia ex rel.
Integra REC LLC v. Barclays Capital Inc., et al., against the Company and several other defendants in the Circuit Court of
the City of Richmond related to RMBS. The lawsuit alleged that the Company and the other defendants knowingly made
misrepresentations and omissions related to the loans backing RMBS purchased by the Virginia Retirement System. The
complaint asserts claims under the Virginia Fraud Against Taxpayers Act, as well as common law claims of actual and
constructive fraud, and seeks, among other things, treble damages and civil penalties. On January 6, 2016, the parties reached
an agreement to settle the litigation. An order dismissing the action with prejudice was entered on January 28, 2016.
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