According to reports, a lawsuit entitled The Sisters of Jesus and Mary vs. Morgan Stanley has been filed at a court in Ireland.
The nuns are among 88 investors who purchased â¬5.88 million worth of bonds between January 2005 and December 2006.
In the claim, the investors state that they acquired the securities on the promise they would deliver returns of 6.25 per cent for up to four years.
However, when the global credit crisis began during the second half of 2008, the value of the bonds dropped and Standard & Poorâs downgraded their rating to junk in early 2009, the claimants have alleged.
Morgan Stanley is accused of waiting five months before selling the bonds, despite the terms of the contract stating that they should have been sold immediately.
The lawyers acting on behalf of the investors, who were quoted by Bloomberg, said that the value of the bonds went up in this period, âthereby securing Morgan Stanley a profit of at least $11.2 million on the sale of the notes by way of a termination paymentâ.
Bloxham, Irish stockbrokers, who sold the securities have not been named in the claim.
By Jim Ottewill