A group of Irish investors, including hundreds of nuns, has filed a class action suit with the U.K.'s High Court alleging that Morgan Stanley failed to satisfy its contractual obligations related to €6 million ($7.9 million) of bonds they bought, resulting in the near total wipeout of their investment. Morgan Stanley declined to comment on the case. (Wall Street Journal)
Edolphus Towns, chairman of the House Oversight and Governance Reform Committee, has introduced a bill that would eliminate enhanced privacy measures for the Securities and Exchange Commission included in the Dodd-Frank Act. The Act gave the SEC explicit exemptions from having to comply with some Freedom of Information Act requests from the press and the public. SEC Chairman Mary Schapiro has told House Financial Services Committee Chairman Barney Frank that the new law "does not provide a blanket SEC exemption from FOIA and is not designed to protect the SEC as an agency from public oversight and accountability." (Reuters)
The U.S. Chamber of Commerce has retained Eugene Scalia, the son of U.S. Supreme Court Justice Antonin Scalia, to review for a potential legal challenge expected Securities & Exchange Commission rules letting investors nominate directors on corporate proxies. “We will wait for the SEC to move forward and see what our options are,” says Tom Quaadman, v.p. of the Chamber’s Center for Capital Markets Competitiveness. (Bloomberg)
Japan’s Financial Services Agency has picked Goldman Sachs, Morgan Stanley and Nomura as initial subjects of a new unit to scrutinize risk-taking among investment banks, according to a person with direct knowledge of the matter. The team of at least 10 inspectors will examine the three firms’ local trading in derivatives and bets using their own money, the person said, adding that the FSA will carry out checks to make sure the companies don’t take risks that jeopardize their local operations. Spokespeople for the FSA, Nomura, Morgan Stanley and Goldman Sachs declined to comment. (Bloomberg)