Three groups of nuns are leading a £3.2m lawsuit against Deutsche Bank and Morgan Stanley.
The Sisters of Charity of Jesus and Mary, the Holy Faith Sisters and the Irish Veterinary Benevolent Fund are part of a group of 88 individuals who are suing the two banks for allegedly profiting at their expense, according to The Telegraph.
The nuns and other investors bought euro-denominated notes worth £4.8m linked to Dresdner Bank bonds in 2005. They claim Morgan Stanley failed to deliver on contractual pledges to redeem the debt after Dresdner Bank's credit rating was cut below an agreed point.
Morgan Stanley, the nuns say, instead waited until the value of Dresdner Bank debt increased to a point where it would not cost them to redeem the notes. By this point, the nuns allege, the bank's actions had cost them £2.9m plus more than £400,000 in lost interest payments.
Meanwhile, Morgan Stanley allegedly made £7.2m from the delay. The bank's spokespeople have declined to comment further other than to say it has not yet been served with the legal papers. Deutshe Bank has made no comment.
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