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Morgan Stanley escapes suit over hospital's pension investments
http://newsandinsight.thomsonreuters.com/Legal/News/2013/04_-_April/Morgan_Stanley_escapes_suit_over_hospital_s_pension_investments/NEW YORK (Reuters) - A divided federal appeals court tossed a lawsuit Tuesday accusing Morgan Stanley's asset management arm of inappropriately sinking a New York hospital's pension fund into toxic mortgage securities, in a decision that the dissenting judge said could insulate banks in future cases.
The 2nd U.S. Circuit Court of Appeals in New York upheld the dismissal of a lawsuit advanced by the Pension Benefit Guaranty Corp, which had taken over the underfunded pension plan of Saint Vincent Catholic Medical Centers in 2010.
In a 2-1 decision, the court said the lawsuit failed to allege facts supporting its claim that Morgan Stanley Investment Management, which oversaw the pension plan's fixed-income portfolio, knew the mortgage-backed securities it bought were ill-advised investments.
Those investments caused the pension plan to lose $25 million, the complaint said.
