Morgan Stanley Urges Toss of Suit Over $147M MBS Losses
April 1, 2014
Mark Arisohn argues on behalf of IKB that the RMBS case against Morgan Stanley is not time-barred
Labaton Sucharow partner Mark Arisohn recently argued against Morgan Stanley attorneys who claimed that a pending residential mortgage backed securities related lawsuit brought by German bank IKB should be dismissed. Morgan Stanley claimed that IKB should have been notified in 2007 (outside of the statute of limitation in both Germany and New York) about the increasing risk of the subprime market in the U.S.
However Arisohn told the judge all the general information available in 2007 about the tenuous nature of the U.S. subprime real estate market is irrelevant since there was no indication that Morgan Stanley was committing fraud.
“What has Morgan Stanley pointed to ... that would have been discovered by the most diligent investigation to show, 'Aha, Morgan Stanley committed fraud,'” Arisohn said. “There’s nothing — not a single thing.”
Arisohn added that the German central bank’s notice was recommending an investigation of some of the loan originators who were going bankrupt and contained nothing about Morgan Stanley committing fraud.