Bloomberg News reports that brokerage clients who elected electronic delivery of documents can rescind purchases of mutual funds they bought from Nov. 8, 2013, through Aug. 14, New York-based Morgan Stanley said in a letter addressed to fund companies and obtained by the news agency. Customers who have already sold such holdings at a loss can be made whole, the bank said.
While Morgan Stanley didn’t provide an estimate of what it would cost to cover client losses, doing so may shield the company from litigation, according to the letter.
'By conducting the rescission offer,' the bank wrote, 'clients should be precluded in the future from requiring us to repurchase fund shares or maintaining an action against Morgan Stanley.'
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