Rejecting MS plea to dismiss MetLife’s claims of fraud, New York State Supreme Court Justice Eileen Bransten in Manhattan said that the insurer can go ahead with its accusations against the bank, as reported by Reuters.
In April 2012, the life insurer filed a case and claimed that the bank was fully aware that home loans underlying the securities were faulty, as the same has also been proved in an independent third party assessment.
Further, the lender also destroyed the documents, which established incapability of borrowers to afford their loans, so that it could negotiate cheaper prices prior to converting the loans into the securities, which MetLife purchased in 2006 and 2007.
The amended complaint was quoted by the news agency as saying, "Morgan Stanley was only too willing to go along with further machinations by its loan originators, which further heightened the risks for unsuspecting loan investors such as MetLife."
"Morgan Stanley advances no independent arguments in favor of dismissing either the fraudulent inducement or the aiding and abetting causes of action," Bransten wrote.
