Morgan Stanley $3.4 Billion Italy Swaps Case Is Dropped

An Italian regional audit court ruled that it isn’t authorized to decide on a request for damages against Morgan Stanley and four former Treasury officials over derivatives deals the U.S. investment bank exited between the end of 2011 and the beginning of 2012. The Morgan Stanley derivative contracts from the 1990s were terminated in December 2011 and January 2012. Italy paid Morgan Stanley $3.4 billion to close the deals as the bank used an early termination clause included in the contract, a person with direct knowledge of the transactions said at the time.