The Japanese securities venture between Mitsubishi UFJ and Morgan Stanley Securities has reportedly countered claims made in a lawsuit by investors of Credit Suisse’s AT1 bonds.
Mitsubishi UFJ Morgan Stanley Securities has disputed accusations made by Japanese investors who bought Credit Suisse’s additional Tier 1 (AT1) bonds through the joint venture, according to a «Nikkei Asia» report.
140 billion yen ($960 million) of the AT1 bonds were sold in Japan. Of the total, 95 billion yen of the bonds were sold through Mitsubishi UFJ Morgan Stanley to 1,550 clients, including 1,300 individual investors. Investors are seeking 6.9 billion yen in damages from the broker.
Countering Accusations
The plaintiffs claim that related risks were not clearly communicated, most notably the clause about a viability event that led to a $16 billion write-down. Mitsubishi UFJ Morgan Stanley Securities defended the sale, noting that investors were «wealthy» and had «a commensurate level of knowledge or experience in investment.»
According to an official from Japan's Financial Services Agency, the issue is whether or not investors were misled into buying AT1 bonds and not the sale itself.
