Discrimination suit filed against Morgan Stanley
16 Oct 2012 11:55 PM GMT
Morgan Stanley is being accused of discriminating against black homeowners and violating US Federal civil rights laws by providing strong incentives to a subprime lender to originate mortgages that were likely to go unrepaid.
The lawsuit was filed by American Civil Liberties Union and others on behalf of five Detroit residents and Michigan Legal Services. ‘We believe these allegations are completely without merit and plan to defend ourselves vigorously,’ Morgan Stanley said.
The five homeowners received their loans from New Century Mortgage Corp, which has since collapsed. The lawsuit claims Morgan Stanley pushed NCMC to issue loans with no concern about risk, because it made its profit when the investment bank bundled the loans into securities and sold them.
The lawsuit was filed by American Civil Liberties Union and others on behalf of five Detroit residents and Michigan Legal Services. ‘We believe these allegations are completely without merit and plan to defend ourselves vigorously,’ Morgan Stanley said.
The five homeowners received their loans from New Century Mortgage Corp, which has since collapsed. The lawsuit claims Morgan Stanley pushed NCMC to issue loans with no concern about risk, because it made its profit when the investment bank bundled the loans into securities and sold them.
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