An Irish congregation of nuns have reached a settlement with investment bankers Morgan Stanley and two other financial institutions.
The Holy Faith Sisters, based in Dublin, have been as one of the 130 investment groups to have settled compensation and a damages claim.
London’s High Court has heard that the investors, which also include the English based Sisters of Charity of Jesus and Mary and the Irish Veterinary Beneficiary Fund, sought over $40million.
The Irish Times reports that they have now reached a provisional agreement with Morgan Stanley and two other financial institutions.
The legal action was launched in 2010 when they claimed to have ‘bought hybrid structured euro constant maturity swap notes’ secured by bonds issued by Dresdner Bank through Bloxham stockbrokers, the Dublin company which has since been put into liquidation.
They claimants told the London court that they lost more than $30 million, money they are now seeking back from Morgan Stanley Co International, Morgan Stanley Capital Services, Saturns Investments Europe and Deutsche Trustee Company Ltd, alongside $14million in damages.
They alleged that Saturns, with the knowledge and co-operation of the Morgan Stanley companies, ‘deliberately or carelessly’ did not redeem the notes when a mandatory redemption was triggered in January 2009 after the underlying bonds created by Dresdner Bonds were downgraded by Standard Poors to BBB- grade, or below.
The investors also claimed that the notes were redeemed six months later when their value had risen substantially, leading to a $15million profit for Morgan Stanley.
Lawyers for the Morgan Stanley companies, Saturns and Deutsche Trustees, told the London High Court that a provisional agreement had been reached with the investors but further time was needed to resolve the terms of the settlement.
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