{"id":5195,"date":"2011-07-06T00:00:00","date_gmt":"2011-07-06T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/07\/allstate_files_mortgagebacked"},"modified":"2022-04-04T16:00:23","modified_gmt":"2022-04-04T21:00:23","slug":"allstate-files-mortgagebacked","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/allstate-files-mortgagebacked\/","title":{"rendered":"Allstate Files Mortgage-Backed Securities Fraud Lawsuit Against Morgan Stanley"},"content":{"rendered":"

Allstate Insurance Co., which bought over $104M in residential mortgage-backed securities<\/a> in 6 offerings from Morgan Stanley <\/a>between \u201805 and \u201907 is suing the broker-dealer for securities fraud. The insurer claims that the financial firm sold it RMBS under the assurances that they were in alignment with \u201cconservative\u201d underwriting standards and that the properties had received accurate appraisals when, actually, Morgan Stanley RMBS did not meet these standards and had come from originators that Allstate categorizes as among \u201cworst\u201d in the subprime lending: <\/p>\n

\u2022\tNew Century Financial Corp.
\n\u2022\tDecision One Mortgage Co.
\n\u2022\tWMC Mortgage Corp.
\n\u2022\tFirst NLC Financial Services
\n\u2022\tWilmington Finance Inc.
\n\u2022\tAIG Federal Savings Bank<\/p>\n

Allstate says that leading up to the financial collapse, it had acquired $2.78 billion in mortgage-backed securities. It bought RMBS from Morgan Stanley because of the \u201ccentral role\u201d the financial firm made in creating and selling the securities, the latter\u2019s assurances that it had done its due diligence on the mortgages backing the securities, and because of the prospectuses, registration statements, and other documents. Now, the insurance company believes that the brokerage firm either knew that the lenders were putting forth risky loans that did not conform to standards or recklessly disregarded the facts. <\/p>\n

Allstate is seeking unspecified compensatory and\/or \u201crecessionary\u201d damages and is asking for a jury trial. This is not the first RMBS that the insurance company has filed. Allstate has already sued several other brokerage firms for MBS fraud including:<\/p>\n

\u2022\tMerrill Lynch (a Bank of America unit)
\n\u2022\tCountrywide (also a Bank of America units)
\n\u2022\tCitigroup Inc.
\n\u2022\tJP Morgan Chase & Co.
\n\u2022\tDeutsche Bank AG
\n\u2022\tCredit Suisse Group AG
\n
\nRelated Web Resources: <\/strong>
\nMorgan Stanley Sued by Allstate Over Mortgage Securities Fraud Claims<\/a>, Bloomberg, July 6, 2011<\/p>\n

Allstate adds Morgan Stanley to RMBS litigation pool<\/a>, Housing Wires, July 6, 2011<\/p>\n


\nMore Blog Posts:<\/strong>
\nBank of America Cop. (BAC)\u2019s Merrill Lynch a Defendant of Class-Action Mortgage-Backed Securities Lawsuit Against at Least 1,800 Investors<\/a>, Institutional Investors Securities Blog, June 25, 2011<\/p>\n

National Credit Union Administration Board Files $800M Mortgage-Backed Securities Fraud Lawsuits Against JP Morgan Securities, RBS Securities, and Other Financial Institutions<\/a>, Institutional Investors Securities Blog, June 23, 2011<\/p>\n

Morgan Keegan Settles Subprime Mortgage-Backed Securities Charges for $200M<\/a>, Stockbroker Fraud Blog, June 29, 2011<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Allstate Insurance Co., which bought over $104M in residential mortgage-backed securities in 6 offerings from Morgan Stanley between \u201805 and \u201907 is suing the broker-dealer for securities fraud. The insurer claims that the financial firm sold it RMBS under the assurances that they were in alignment with \u201cconservative\u201d underwriting standards and that the properties had […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3757],"tags":[],"class_list":["post-5195","post","type-post","status-publish","format-standard","hentry","category-mortgagebacked-securities"],"yoast_head":"\nAllstate Files Mortgage-Backed Securities Fraud Lawsuit Against Morgan Stanley — Investor Lawyers Blog — July 6, 2011<\/title>\n<meta name=\"description\" content=\"Allstate Insurance Co., which bought over $104M in residential mortgage-backed securities in 6 offerings from Morgan Stanley between \u201805 and \u201907 is suing — July 6, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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