Irish nuns take on Morgan Stanley in British court
A group of Irish nuns are among investors taking US financial giant Morgan Stanley to court in Britain, claiming the bank lost them more than five million euros, their lawyers said.
The Holy Faith Sisters are among 88 investors who accuse the bank of mismanaging their almost six-million-euro (7.7-million-dollar, five-million-pound) investment, said law firm Stewarts Law LLP on Thursday.
The investors -- who include individuals and religious groups -- allege they lost more than 75 percent of their money, while the bank made a profit.
Their claim relates to complex securities, whose value was derived from underlying bonds, bought by the investors in 2005 and 2006 from Saturns Investments Europe Plc, a unit of Morgan Stanley.
Their claim was submitted to the High Court in London on Tuesday, said their lawyers.
According to the claimants, Saturns was obliged to sell the securities if they were downgraded to a certain level.
But the finance firm delayed selling the securities when their value plummeted during the economic crisis, causing its clients to lose a considerable sum, they allege.
Saturns, with the help of Morgan Stanley, "deliberately or carelessly did not redeem the notes" when the bonds from which they derived their value were downgraded to "junk" status in January 2009, according to the claim which was obtained by AFP.
Morgan Stanley and Saturns only sold them in June 2009 after the bonds had rallied, which led to "substantial gains" of millions of dollars for Morgan Stanley, said the claim.
Morgan Stanley has declined to comment on the case.
© 2010 AFP