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Morgan Stanley has seen its bid to ask a Singapore court to block investors from suing the bank dashed, according to Bloomberg. The bank had sought a Singapore high court order last month to stop investors from taking legal action but a New York judge has ruled that Morgan Stanley cannot pursue this course of action.

The case relates to a class of Pinnacle notes issued by Morgan Stanley between 2006 and 2007. The notes were backed by a pool of synthetic CDOs which themselves were tied to some of the biggest names hit by the financial crisis such as Lehman Brothers and Iceland’s Kaupthing and Landsbanki banks. The notes were sold to a number of retail investors in Singapore who had their $155 million investment completely wiped out. These investors claim that Morgan Stanley did not disclose that it was the swap counterparty, which resulted in the bank profiting as the Pinnacle notes saw their value evaporate.

A Morgan Stanley spokesperson is cited as saying that the bank disagrees with the court ruling, pointing out that the attempt to seek a Singapore high court order was entirely appropriate given that investors had contractually agreed to the exclusive jurisdiction of the Singapore courts.  

According to a court filing, Morgan Stanley states that any alleged misstatements on the notes “were mere puffery” or “vague statements of optimism”.