Breaking News Bar
posted: 10/15/2012 1:42 PM

Morgan Stanley facing discrimination lawsuit

hello
Success - Article sent! close
  • Rubbie McCoy, left, a plaintiff in a lawsuit filed against Morgan Stanley, reacts while describing her housing situation during a news conference Monday in New York. With her is attorney Elizabeth Cabraser. McCoy and four other Detroit homeowners have filed a lawsuit claiming Morgan Stanley discriminated against black homeowners and violated federal civil rights laws.

      Rubbie McCoy, left, a plaintiff in a lawsuit filed against Morgan Stanley, reacts while describing her housing situation during a news conference Monday in New York. With her is attorney Elizabeth Cabraser. McCoy and four other Detroit homeowners have filed a lawsuit claiming Morgan Stanley discriminated against black homeowners and violated federal civil rights laws.
    ASSOCIATED PRESS

 
Associated Press

NEW YORK -- Morgan Stanley is being accused of discriminating against black homeowners and violating federal civil rights laws by providing strong incentives to a subprime lender to originate mortgages that were likely to go unrepaid.

The lawsuit, which seeks class-action status, was filed Monday by the American Civil Liberties Union and others on behalf of five Detroit residents and Michigan Legal Services. It was filed in U.S. District Court in New York.

Order Reprint Print Article
 
Interested in reusing this article?
Custom reprints are a powerful and strategic way to share your article with customers, employees and prospects.
The YGS Group provides digital and printed reprint services for Daily Herald. Complete the form to the right and a reprint consultant will contact you to discuss how you can reuse this article.
Need more information about reprints? Visit our Reprints Section for more details.

Contact information ( * required )

Success - request sent close

"We believe these allegations are completely without merit and plan to defend ourselves vigorously," Morgan Stanley said in a statement.

The five homeowners in the lawsuit received their loans from subprime lender New Century Mortgage Corp., which has since collapsed.

The lawsuit claims Morgan Stanley pushed New Century to issue certain types of loans with no concern about risk, because it made its profit at the outset when the investment bank bundled the loans into securities and sold them.

"With this lawsuit, real victims of the subprime lending scandal are stepping forward to hold investment banks like Morgan Stanley accountable for the devastation the banks wrought in their lives and in our economy," ACLU Executive Director Anthony D. Romero said in a statement.

Shares of Morgan Stanley added 20 cents to $17.51 in morning trading on Monday.

Share this page
Comments ()
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the X in the upper right corner of the comment box. To find our more, read our FAQ.
    help here