Mitsubishi UFJ Financial Group’s brokerage joint venture with Morgan Stanley has been sued by more Japanese investors over the Credit Suisse Additional Tier 1 write-down.
Mitsubishi UFJ Morgan Stanley Securities has been hit by another lawsuit representing 26 plaintiffs in Japan, according to a filing led by Yamazaki Marunouchi Law Office submitted to the Tokyo District Court. 1.7 billion yen ($12 million) in compensation is being demanded over losses linked to the $17 billion Credit Suisse AT1 write-down.
The plaintiffs allege that the joint venture between MUFG and Morgan Stanley violated a suitability principle by selling bonds that were intended for professional institutions to regular investors. They also allege that not enough explanation was provided for investors to determine what would be considered a viability event.
Legal Troubles in Japan
This marks the second suit filed by the same law firm against Mitsubishi UFJ Morgan Stanley Securities. Earlier this year, Yamazaki Marunouchi Law Office represented 66 different plaintiffs in suing the joint venture in a separate 5.2 billion yen suit.
Staying within Japan, investors have also made legal pursuits against the brokerage arms SBI Holdings, Rakuten Group and Monex Group.
Two-Thirds of Total Sales
Overall, Japanese investors bought 140 billion yen of Credit Suisse’s AT1 notes with Mitsubishi UFJ Morgan Stanley Securities accounting for around two-thirds of total sales.
