A Morgan Stanley employee identifying himself as a credit audit specialist sued the bank over claims he suffered retaliation after voicing concerns about the growing number of high-risk loans in its portfolio.
Bloomberg News reports that Saeed Ahmad alleged he was demoted after he conducted audits and told superiors about the risks the bank was taking and what he saw as a lack of adequate controls, according to a suit filed today in federal court in Manhattan.
Until November 2004, most of Morgan Stanley’s corporate loan portfolio consisted of lines of credit provided to 'highly credit-worthy companies' with AAA to A ratings, Ahmad said in the complaint. After that, the firm began lending to companies with the non-investment grade ratings of BB+ to B range, he said.
'Ahmad is a whistle-blower who, out of loyalty to his employer, Morgan Stanley, his duty toward shareholders and out of professional obligation, attempted to point out to his superiors and others at the bank the risks the bank was taking', he said in the complaint.
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