An investor has sued global financial services firm Morgan Stanley, accusing it of giving a 'stamp of approval' to a company and hiding its financial woes in pursuit of big investment-banking fees, a media report said.
Ronald Perelman told a Florida jury in West Palm Beach that, on the advice of Morgan Stanley, he sold his stake in Coleman Inc. to appliance firm Sunbeam, which later became engulfed in an accounting scandal, thereby driving down the value of his stock, The Wall Street Journal reported on Wednesday.
"This was a firm that prided itself on being of the highest integrity, quality and character. We did not expect Morgan Stanley to lie to us and tell us untruths," Perelman, who sold his stake to Sunbeam for approximately $1.5 billion, including $680 million in stock, told the court.
Denying any wrongdoing in the case, Morgan Stanley tried to distance itself from the billionaire financier, painting Perelman as a sophisticated investor who sees opportunities where others don't.
Mark Hansen, lawyer for Morgan Stanley, told the court that Perelman acts on instinct and often does little or no research while making big investments.
Morgan Stanley, said The Wall Street Journal, has set aside $360 million to cover the potential costs of the suit, a far cry from the $20 million for which Perelman initially offered to settle the case.