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Case Status:    DISMISSED    
On or around 03/02/2009 (Notice of voluntarily dismissal)

Filing Date: March 25, 2008

According to a press release dated March 25, 2008, a group of investors sued Morgan Stanley on Tuesday over the brokerage's alleged deceptive marketing of auction-rate securities. The lawsuit, filed in U.S. District Court in Manhattan, alleges that Morgan Stanley "deceptively marketed" auction-rate securities as cash alternatives to money-market funds for investors needing liquidity and failed to make material disclosures about those securities. The complaint is seeking injunctive relief to "compel Morgan Stanley to rescind millions of dollars in ARS transactions" and is seeking compensatory and punitive damages. The lawsuit is seeking class-action status on behalf of thousands of investors who acquired auction-rate securities from Morgan Stanley between March 25, 2003, and Feb. 13, 2008. Auction-rate securities are long-term bonds that have a short-term debt component, in which interest rates are reset in auctions on a daily, weekly or monthly basis. In February, several auctions failed, driving up the interest rates for issuers such as municipalities, student-loan providers and museums. The collapse of the auction-rate securities market has left investors locked into those illiquid investments.

On July 9, 2008, District Court Judge Alvin K. Hellerstein denied the pending motions for consolidation, for appointment of lead plaintiffs and approval of selection of counsel. According to the Order, because the Judicial Panel on Multidistrict Litigation is currently considering, pursuant to 28 U.S.C. ยง 1407, whether these cases raise common questions of fact with other auction rate securities litigation pending across the country such that the cases should be coordinated or consolidated for pretrial proceedings, there is no utility in ruling on the motions for consolidation and for appointment of lead plaintiff and counsel at this time.

On October 20, 2008, the Court entered the certified true copy of MDL Order from the MDL Panel. According to the Order, the motion to centralize 29 actions related to the widespread failure in the market for auction rate securities (ARS) is denied.

On March 2, 2009, the plaintiff voluntarily dismissed this action without prejudice.


Sector: Financial
Industry: Investment Services
Headquarters: United States


Ticker Symbol: MS
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-03012
JUDGE: Hon. Alvin K. Hellerstein
DATE FILED: 03/25/2008
CLASS PERIOD END: 02/13/2008
  1. Klayman & Toskes, P.A.
  2. Levi & Korsinsky, LLP (former)
No Document Title Filing Date
—Reference Complaint Complaint Related Data is not available
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