Banking, finance, and taxes
Cuomo Crushes Morgan Stanley (MS)
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Morgan Stanley (MS) thought it could pull a "monkey see, monkey do" act with NY State Attorney General Andrew Cuomo. The investment house offered to buy back $4.5 billion in auction-rate securities using much the same system that Merrill Lynch (MER), Citigroup (C), and UBS (UBS) used to settle their differences with the government.
Cuomo would have none of it.
According to the FT, A spokesman for Andrew Cuomo, New York attorney-general, said the Morgan Stanley offer was “too little, too late’ and added: “Our investigation into Morgan Stanley continues.”
While it is fine for Cuomo to get a piece of the thugs who sold the auction-rate securities on false pretenses, he now risks pointlessly damaging the investors in firms like Morgan Stanley.The investment bank’s shares have recovered most of what they lost in early July. Cuomo can make sure that the stock price rebound is arrested.
But, what does the Attorney General gain by pounding the Morgan Stanley shareholders?
Douglas A. McIntyre
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