A.C.L.U. to Sue Morgan Stanley Over Mortgage Loans - NYTimes.com
ACLU TO SUE MORGAN STANLEY — NYT’s Jessica Silver-Greenberg on B1:
“The American Civil Liberties Union is accusing Morgan Stanley of
fueling the production of risky, expensive loans that targeted
African-American borrowers. In the lawsuit, expected to be filed on
Monday, the ACLU claims that Morgan Stanley is culpable for predatory
loans made through the New Century Financial Corporation because the
investment bank lent billions of dollars to New Century, a now-defunct
subprime lender, and pressured it to make troublesome loans to
African-American borrowers who could not afford them.
“Morgan Stanley packaged the loans made by New Century and sold them
to pension funds and other large investors. But, the lawsuit claims, the
bank went beyond the traditional role of an investment bank by
requiring that the mortgage company churn out the wildly profitable
loans that came with ‘dangerous’ characteristics. … Morgan Stanley
declined to comment on Sunday.”
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