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Crane 100 Money Fund Index
Bloomberg writes "Morgan Stanley Pushed S&P to Boost Ratings, Investors Say"
, which discusses some aspects of a lawsuit involving star-crossed SIV Cheyne Finance, a major cause of losses for some money fund sponsors during the 2007-2008 subprime liquidity crisis
. The article says, "
Morgan Stanley successfully pressured Standard & Poor'
s and Moody'
s Investors Service Inc. to give erroneous investment-
grade ratings in 2006 to $
23 billion worth of notes backed by subprime mortgages, investors claimed in a lawsuit, citing documents unsealed in federal court. Executives at the ratings firms failed to warn investors about the risks associated with subprime-backed notes that were issued by a unit of London-based hedge fund Cheyne Capital Management Ltd. because they wanted to reap financial rewards from doing business with Morgan Stanley, the sixth-largest U.S. bank by assets and designer of the notes, the investors allege, citing the material made public today in Manhattan
.... The lawsuit was filed in 2008 by Abu Dhabi Commercial Bank
, based in the United Arab Emirates, and Washington's King County
, which includes Seattle. The lawsuit focuses on notes issued by Cheyne Finance Plc, a so-called structured-investment vehicle that collapsed in 2007. SIVs issued short-term debt to fund purchases of higher- yielding long-term notes and failed when credit dried up amid the financial crisis, sparked by investments in mortgage-backed securities