According to Bloomberg News, Sealink Funding, Ltd. Sued Morgan Stanley, accusing the bank of fraud related to over $556M in residential mortgage-backed securities. Sealink filed the lawsuit in a New York Supreme Court on January 20. Sealink is a fund created to manage the risky assets of Landesbank Sachsen AG after the near collapse of the German lender. Morgan Stanley provided information for the securities purchased between 2006 and 2007. According to Morgan Stanley, they conducted due diligence on the lenders of the mortgages that the investments were based on. They also assured Sealink that the loans were up to underwriting standards and were deserving of the AAA ratings they were given, according to Sealink lawyers. In the lawsuit, Sealink said, “In truth, and as Sealink and the world would only later discover, the originators whose loans collateralized the Morgan Stanley RMBS at issue were among the worst of the worst culprits in the subprime lending industry. A Morgan Stanley spokeswoman, Lauren Onis, had no immediate comment on the lawsuit.