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Morgan Stanley investigated by U.S. federal authorities: report

05-12-2010 15:47 BJT

BEIJING, May 12 (Xinhuanet) -- U.S. federal investigators are probing whether Morgan Stanley misled investors about mortgage derivative products it helped create and sometimes bet against, according to the Wall Street Journal Wednesday.

Morgan Stanley marketed to investors pools of bond-related investments called collateralized debt obligations, and its trading desk at times placed bets that their value would fall, according to the Journal.

U.S federal investigators are examining whether Morgan Stanley made proper representations about its roles in the mortgage derivative deals, the newspaper said.

“We have not been contacted by the Justice Department about the transactions being raised by the Wall Street Journal, and we have no knowledge of a Justice Department investigation into these transactions,” Morgan Stanley spokesman Nick Footitt was quoted as saying by Bloomberg News.

The U.S. Securities and Exchange Commission has so far declined to comment to the newspaper.

Editor:Zhang Jingya |Source: Xinhua

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