SAN FRANCISCO (Legal Newsline) — California Attorney General Kamala D. Harris has filed a lawsuit against Morgan Stanley for allegedly misrepresenting complex investments like mortgage-backed securities that contributed to the global financial crisis and to major losses by investors that included California’s public pension funds, which provide retirement security to California peace officers, firefighters and teachers.
Harris’ office alleges Morgan Stanley violated the False Claims Act, the California Securities Law and other state laws by concealing or understating risks associated with many of its investments.
“Morgan Stanley’s conduct in this case evidenced a culture of greed and deception that helped create a devastating economic crisis and crippled California’s budget,” Harris said. “This lawsuit is necessary in order to hold Morgan Stanley accountable for the destruction it caused to California, our people and our pension funds.”
The California Public Employees Retirement System and the California State Teachers Retirement System both lost hundreds of millions of dollars on these Morgan Stanley investments.
Harris’ office says it has fought to hold corporations accountable in the mortgage industry throughout the years. To date, her office has recovered more than $900,000 for California’s public pension funds in settlements with three banks.
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