CHINA DEVELOPMENT INDUSTRIAL BANK v. MORGAN STANLEY & CO. INCORPORATED

5520, 650957/10.

86 A.D.3d 435 (2011)

927 N.Y.S.2d 52

2011 NY Slip Op 5871

CHINA DEVELOPMENT INDUSTRIAL BANK, Respondent, v. MORGAN STANLEY & CO. INCORPORATED et al., Appellants, et al., Defendants.

Appellate Division of the Supreme Court of New York, First Department.

Decided July 7, 2011.


In this action alleging common-law fraud, fraud in the inducement and fraudulent concealment in the sale of an investment product (credit default swaps), plaintiff purchaser (China) alleges that defendant seller Morgan falsely promoted collateral debt obligations as having specified credit ratings, which Morgan knew to be overstated and misleading. Specifically, the ratings were allegedly generated with grandfathered models and protocols and assumptions that were no longer...

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