It seems that Hong Leong Finance has initiated a lawsuit in USA against Morgan Stanley for the Pinnacle notes which they had previously distributed.
According to Hong Leong, the Pinnacle Notes were rigged to fail for Morgan Stanley’s own benefit. As a result of the failure of the Pinnacle notes, Hong Leong had to compensate customers for about US$30 million of losses. They had sold about US$70 million worth of the notes. The lawsuit aims to recover this compensation.
The lawsuit by Hong Leong comes after a group of investors has initiated a lawsuit against Morgan Stanley for similar reasons.
The lawsuit is interesting and has the potential to open up a big can of worms should Hong Leong win their case and are able to establish that their claims are valid. We could end up having more questions than answers. Questions like: