» Subscribe Today!
More of what you want to know.
The Daily News
X

Forgot your password?
Skip Navigation LinksHome >
VOL. 127 | NO. 202 | Tuesday, October 16, 2012

Morgan Stanley Facing Discrimination Lawsuit

AP

Print | Front Page | Email this story | Comments ()

NEW YORK (AP) 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.

"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.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Sign-Up For Our Free Email Edition
Get the news first with our daily email


 
Blog Get more from The Daily News
Blog News, Training & Events
RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 52 136 5,209
MORTGAGES 79 182 6,891
FORECLOSURE NOTICES 0 37 1,593
BUILDING PERMITS 328 328 12,307
BANKRUPTCIES 66 171 5,471
BUSINESS LICENSES 30 58 2,119
UTILITY CONNECTIONS 85 182 7,240
MARRIAGE LICENSES 0 24 1,482

Weekly Edition

Issues | About

The Memphis News: Business, politics, and the public interest.