Irish nuns settle multi-million London lawsuit
A GROUP of over 130 Irish investors -- including two groups of nuns -- has provisionally settled a multi-million euro lawsuit against a global financial giant.
The High Court in London heard yesterday how the investors, among them the Sisters of Charity of Jesus and Mary and The Holy Faith Sisters, had reached agreement with New York-based Morgan Stanley over a contentious €20m bond purchase.
The investors claimed the financial services firm had taken a profit for itself but had failed to sell the investments when it should have.
The issue surrounded the purchase and subsequent sale of financial bonds.
The Irish investors bought the notes for just over €20m but they were later downgraded to junk status in January 2009.
The 132 investors, which also includes the Irish Veterinary Benevolent Fund and a number of private individuals, said Morgan Stanley "deliberately or carelessly failed to redeem" them until later when the bank could secure itself a payment.
They say this resulted in a loss of some €19.5m to them.
Following discussions between the parties yesterday, the High Court in London heard that the issue was almost settled.
Andrew Sutcliffe QC, for the investors, said terms of settlement were "provisionally agreed".
The remaining issue surrounds the division of the compensation between Morgan Stanley and Bloxham stockbrokers, through which the bonds were bought.
The notes were bought through Bloxham Stockbrokers, in a process arranged by Morgan Stanley, in 2005 and 2006.
The stockbrokers was ordered by the Central Bank to cease trading last month after the discovery of "financial irregularities".
It is not known what the details of the provisional settlement are.
The lawsuit is "speculative and without merit," Morgan Stanley and the other defendants said, in court documents.