dismissals, the remaining
amount of certificates allegedly issued by MS&Co. or sold to the plaintiff by MS&Co. was approximately $332 million. On February 6, 2017, the action was remanded to the
Superior Court of the Commonwealth of Massachusetts. On July 13, 2018, the parties reached an agreement in
principle to settle the litigation the terms of which are confidential.
On May 3, 2013, plaintiffs in Deutsche Zentral-Genossenschaftsbank AG et al. v. Morgan Stanley et al. filed
a complaint against MS&Co., certain affiliates, and other defendants in the Supreme Court of NY. The
complaint alleges that the defendants made material misrepresentations and omissions in the sale to the
plaintiffs of certain mortgage pass-through certificates backed by securitization trusts containing
residential mortgage loans. The total amount of certificates allegedly sponsored, underwritten and/or sold
by MS&Co. to the plaintiff was approximately $634 million. The complaint alleges causes of action against
MS&Co. for common law fraud, fraudulent concealment, aiding and abetting fraud, negligent
misrepresentation, and rescission and seeks, among other things, compensatory and punitive damages. On June
26, 2018, the parties entered an agreement to settle the litigation, the terms of which are confidential.
On April 1, 2016, the California Attorney General’s Office filed an action against MS&Co.
in California state court styled California v. Morgan Stanley, et al., on behalf of California investors, including the California Public Employees’ Retirement System and the California Teachers’ Retirement System. The complaint alleges
that MS&Co. made misrepresentations and omissions regarding residential mortgage-backed securities and notes issued by the Cheyne SIV, and asserts violations of the
California False Claims Act and other state laws and seeks treble damages, civil penalties, disgorgement, and injunctive relief. On September 30, 2016, the court granted MS&Co.’s demurrer, with leave to replead. On October 21, 2016, the
California Attorney General filed an amended complaint. On January 25, 2017, the court denied MS&Co.’s demurrer with respect to the amended complaint. On April 24,
2019, the parties reached an agreement to settle the litigation, the terms of which are confidential.
On December 30, 2013, Wilmington Trust Company, in its capacity as trustee for Morgan Stanley
Mortgage Loan Trust 2007-12, filed a complaint against MS&Co. styled Wilmington Trust Company v. Morgan
Stanley Mortgage Capital Holdings LLC et al., pending in the Supreme Court of NY. The complaint asserted claims for breach of contract and alleged, among other things, that the
loans in the trust, which had an original principal balance of approximately $516 million, breached various representations and warranties. The complaint sought, among other relief, unspecified damages, attorneys’ fees, interest and costs. On
February 28, 2014, defendants filed a motion to dismiss the complaint, which was granted in part and denied in part on June 14, 2016. Plaintiff filed a notice of appeal of that
order on August 17, 2016. On July 11, 2017, First Department affirmed in part and reversed in part an order granting in part and denying in part MS&Co.’s motion to dismiss. On August 10, 2017, plaintiff filed a motion for leave to appeal that
decision. On September 26, 2017, the First Department denied plaintiff’s motion for leave to appeal to the Court of Appeals. On October 31, 2018, the parties entered into an agreement to settle the litigation. On September 10,
2019, the court entered a final judgment and order granting final approval of the settlement. On November 11, 2019, the parties filed a stipulation of voluntary discontinuance,
dismissing the action with prejudice.
On September 19, 2014, FGIC filed a complaint against MS&Co. in the Supreme Court of NY, styled
Financial Guaranty Insurance Company v. Morgan Stanley ABS Capital I Inc. et al. relating to a
securitization issued by Basket of Aggregated Residential NIMS 2007-1 Ltd. The complaint asserted claims
for breach of contract and alleges, among other things, that the net interest margin securities (“NIMS”) in the trust breached various representations and warranties. FGIC issued a financial guaranty policy with respect to
certain notes that had an original balance of approximately $475 million. The complaint sought, among other relief, specific performance of the NIMS breach remedy procedures in
the transaction documents, unspecified damages, reimbursement of certain payments made pursuant to the transaction documents, attorneys’ fees and interest. On November 24, 2014, MS&Co. filed a motion to dismiss the complaint,
which the court denied on January 19, 2017. On February 24, 2017, MS&Co. filed a notice of appeal of the denial of its motion to dismiss the complaint and perfected its
appeal on November 22, 2017. On September 13, 2018, the court affirmed the lower court’s order denying MS&Co.’s motion to dismiss the complaint. On November 13, 2019, the parties entered into an agreement to settle the