Goldman Phone Call, Merrill Comp Payout, Morgan Stanley Settlement


Securities regulators may get the chance to play for jurors a recorded phone call they consider crucial to a financial crisis-related case against a former Goldman Sachs employee.

The Wall Street Journal reports that the decision, made by a federal judge on Friday, reopens the three-year-old case against Fabrice Tourre, a former vice president of Goldman, to possible new evidence.

During the call in question, the Goldman saleswoman told the ACA executive that Goldman was 'placing a hundred percent of the equity' on Abacus with Paulson & Co., according to court papers. Such a position implies that Paulson was betting the CDO would increase in value.

In the meantime, Bloomberg reports that Morgan Stanley has said that it settled suits brought by investors in two structured investment vehicles called Cheyne and Rhinebridge,

The investors, led by Abu Dhabi Commercial Bank and King County, Washington, also agreed to drop their claims against Moody’s Investors Service Inc. and Standard & Poor’s, the world’s largest provider of credit ratings owned by New York-based McGraw-Hill Cos, the investors said in a notice filed in U.S. District Court in Manhattan Friday.

The plaintiffs claimed the defendants gave the vehicles inflated ratings in two separate suits filed in federal court in Manhattan in 2008 and 2009. The rating companies worked with Morgan Stanley to structure the notes, and their compensation was based on the notes receiving the desired ratings, the plaintiffs claimed.

Finally, Reuters reports that a federal judge on Friday gave final approval to a settlement under which Merrill Lynch will pay $21m to end a class action lawsuit by some 1000 former brokers who claimed they were denied deferred compensation when they left after the brokerage merged with Bank of America.

The suit, filed in 2010, stems from Merrill Lynch's merger with Bank of America in September 2008. At issue are years of deferred compensation, some of which was held in brokers' stock savings plans.

Judge Won't Block Use of Recorded Call in Trial (subscriber content)

Morgan Stanley Settles Washington, Abu Dhabi Lawsuits

Court gives final OK to Merrill deferred compensation settlement

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