The Government Employees' Retirement System (GERS) of the United States Virgin Islands filed a $1.2 billion suit against Morgan Stanley last week for allegedly pillowing CDO ratings and marketing investment products it expected to fail.

According to a Dec. 24 lawsuit filed in Manhattan federal court, the Caribbean pension fund accuses the Wall Street bank of collaborating with credit rating agencies to obtain a triple-A for CDO notes it called the “Libertas CDO,” Reuters reported.

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