Dusseldorf based IKB Deutsche Industriebank AG (IKB) has penalised Morgan Stanley over material representation related to $147.1m in residential mortgage-backed securities.
In a judicial writ filed in New York state court in Manhattan, Bloomberg quoted IKB as saying that the US investment bank misrepresented and deleted facts in the material related to the underwriting standards used for underlying home loans, as well as the loan-to-value ratios of the loans.
When questioned about the lawsuit, New York-based Morgan Stanley spokesman Mark Lake refused to comment.
The German lender had earlier in September this year sued Citigroup and Goldman Sachs over losses of $137.4m and $73.2m in mortgage securities respectively.
The lender also separately penalised Bank of America over $200m in mortgage-backed securities.
In 2011, Switzerland’s Credit Suisse Group also faced similar allegation from IKB over $215.4m fraud.