{"id":643,"date":"2010-02-05T23:19:19","date_gmt":"2010-02-05T23:19:19","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2010\/02\/securities_claims_over_morgan_2"},"modified":"2022-07-22T08:26:31","modified_gmt":"2022-07-22T13:26:31","slug":"securities-claims-over-morgan-2","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/","title":{"rendered":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court"},"content":{"rendered":"

\t\t\t\tUpholding a lower court’s decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors’ securities claims in two Morgan Stanley <\/a>(MS) mutual funds-the Morgan Stanley Technology Fund and the Morgan Stanley Information Fund-should be dismissed. The claimants had accused the investment firm of failing to disclose conflicts of interest between investment banking arms and its research analysts. <\/p>\n

The court ruled that mutual fund offering statements are not necessary to disclose possible conflicts of interest that occur due to the dismantling of the “information barrier” between stock researchers and investment bankers. The appellate panel also found that there are two class actions against the open-ended mutual funds that fail to identify illegal omissions in the funds’ prospectuses or registration statements. <\/p>\n

According to investors, they should have been notified that objectivity could be compromised because the managers of the mutual funds heavily depended on broker-dealers for their stock research. Citing the Securities Act of 1933, they filed a securities fraud lawsuit against Morgan Stanley. The plaintiffs contended that the brokerage firm’s offering documents omitted the possible conflict of interest. The plaintiffs claimed that these omissions cost them $500,000 and that the combined losses for the class were over $1 billion. <\/p>\n

A federal judge dismissed their broker fraud<\/a> complaints, citing a failure to prove that the law mandates disclosure of possible conflicts of interest. The second circuit affirmed the lower court’s ruling, saying it agreed with the SEC’s amicus curiae stating that both Form 1-A and the Securities Act do not require defendants to reveal that the information the plaintiffs’ claimed had been left out and that what the plaintiffs considered to be risks specific to the Morgan Stanley funds were in fact ones that every investor faces. <\/p>\n

Among the defendants: Morgan Stanley, Morgan Stanley DW Inc. (MSDWI), MS & Co, the Technology Fund, the Information Fund, Morgan Stanley Investment Management Inc. (MSIM), Morgan Stanley Investment Advisors Inc. (MSIA), and Morgan Stanley Distributors Inc.<\/p>\n

Related Web Resources: <\/strong>
\nSecond Circuit Rules Morgan Stanley Mutual Funds Not Liable for Failing to Disclose Conflicts of Interest with Stock Analysts<\/a>, Law.com, February 1, 2010
\nCourt Nixes Class Actions Against Morgan Stanley<\/a>, Courthouse News, January 29, 2010 Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Upholding a lower court’s decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors’ securities claims in two Morgan Stanley (MS) mutual funds-the Morgan Stanley Technology Fund and the Morgan Stanley Information Fund-should be dismissed. The claimants had accused the investment firm of failing to disclose conflicts of interest between investment banking […]<\/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":[3825,3787,3799],"tags":[],"class_list":["post-643","post","type-post","status-publish","format-standard","hentry","category-financial-advisers","category-morgan-stanley","category-mutual-funds"],"yoast_head":"\nSecurities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court — Investor Lawyers Blog — February 5, 2010<\/title>\n<meta name=\"description\" content=\"Upholding a lower court's decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors' securities claims in two Morgan Stanley (MS) — February 5, 2010\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court — Investor Lawyers Blog — February 5, 2010\" \/>\n<meta name=\"twitter:description\" content=\"Upholding a lower court's decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors' securities claims in two Morgan Stanley (MS) — February 5, 2010\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Shepherd Smith Edwards & Kantas, LLP\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court — Investor Lawyers Blog — February 5, 2010","description":"Upholding a lower court's decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors' securities claims in two Morgan Stanley (MS) — February 5, 2010","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/","twitter_card":"summary_large_image","twitter_title":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court — Investor Lawyers Blog — February 5, 2010","twitter_description":"Upholding a lower court's decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors' securities claims in two Morgan Stanley (MS) — February 5, 2010","twitter_misc":{"Written by":"Shepherd Smith Edwards & Kantas, LLP","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/#article","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/"},"author":{"name":"Shepherd Smith Edwards & Kantas, LLP","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"headline":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court","datePublished":"2010-02-05T23:19:19+00:00","dateModified":"2022-07-22T13:26:31+00:00","mainEntityOfPage":{"@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/"},"wordCount":375,"articleSection":["Financial Advisers","Morgan Stanley","Mutual Funds"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/","url":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/","name":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court — Investor Lawyers Blog — February 5, 2010","isPartOf":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#website"},"datePublished":"2010-02-05T23:19:19+00:00","dateModified":"2022-07-22T13:26:31+00:00","author":{"@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431"},"description":"Upholding a lower court's decision, the U.S. Court of Appeals for the Second Circuit affirmed that investors' securities claims in two Morgan Stanley (MS) — February 5, 2010","breadcrumb":{"@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.investorlawyers.com\/blog\/securities-claims-over-morgan-2\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.investorlawyers.com\/blog\/"},{"@type":"ListItem","position":2,"name":"Securities Claims Over Morgan Stanley Mutual Funds Dismissed by Appeals Court"}]},{"@type":"WebSite","@id":"https:\/\/www.investorlawyers.com\/blog\/#website","url":"https:\/\/www.investorlawyers.com\/blog\/","name":"Investor Lawyers Blog","description":"Published By Investment Fraud Attorneys \u2014 Shepherd Smith Edwards & Kantas, LLP","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.investorlawyers.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.investorlawyers.com\/blog\/#\/schema\/person\/e0240e0754684b69f7d6a7de1b9f1431","name":"Shepherd Smith Edwards & Kantas, LLP","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/c7f8f04990816cd4044977eb59908da8c8d1ae487cc919cebd7027b74a0740a3?s=96&d=mm&r=g","caption":"Shepherd Smith Edwards & Kantas, LLP"},"sameAs":["https:\/\/www.investorlawyers.com\/"]}]}},"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pedX9K-an","_links":{"self":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/643","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=643"}],"version-history":[{"count":2,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/643\/revisions"}],"predecessor-version":[{"id":28370,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/643\/revisions\/28370"}],"wp:attachment":[{"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investorlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}