NEW YORK – The American Civil Liberties Union accused Morgan Stanley of violating civil rights laws by encouraging a lender to push more expensive and risky mortgages on black neighborhoods in Detroit.
The ACLU and others filed the lawsuit Monday on behalf of five homeowners who took out loans from New Century Mortgage Corp., a subprime lender that has since collapsed. Morgan Stanley said the allegations were “completely without merit.”
The lawsuit claims Morgan Stanley pushed New Century to make the risky loans because Morgan made its profit at the start of the process and sold the loans before they could go bad.
The plaintiffs argue that Morgan Stanley encouraged New Century to make “stated-income” loans, in which borrowers provided no verification of their income when they applied for mortgages. Those loans allowed mortgage brokers to inflate borrowers’ income and make them appear more creditworthy.
In a statement, Morgan Stanley denied the charges.
Amazon settles e-book case
NEW YORK – Amazon.com Inc. has informed its Kindle customers that they may receive a credit on previous electronic book purchases as part of settlements between some major e-book publishers and the government.
In September a federal judge approved the U.S Justice Department’s settlement with publishers Hachette, HarperCollins and Simon & Schuster, which were accused of conspiring in a price-fixing scheme.
The state attorneys general estimate the settlement will be from 30 cents to $1.32 for every eligible Kindle book purchased between April 2010 and May 2012.
China’s inflation rate drops
BEIJING – China’s inflation eased further in September, giving the government more room to stimulate the country’s slowing economy.
Consumer inflation fell to 1.9 percent from August’s 2 percent rate, data showed Monday. Politically sensitive food prices rose 2.5 percent, down from the previous month’s 3.4 percent.
The decline gives Beijing more room to cut interest rates or boost spending to reverse the country’s deepest slowdown since the 2008 global crisis.
Producer prices contracted 3.6 percent compared with a year earlier, a striking sign of slack demand despite two interest rate cuts since the start of June and higher government spending on building airports and other public works.
Economic growth fell to a three-year low of 7.6 percent in the quarter ending in June and officials including President Hu Jintao have warned it may decline further before recovering.
Corrosion linked to plant fires
SAN FRANCISCO – Corrosion that went unchecked – the suspected cause of a fire at Chevron Corp.’s Richmond refinery in August – has been linked to a fire at the plant in October 2011, the San Francisco Chronicle reported Sunday
According to state inspection documents obtained by the Chronicle, a state Division of Occupational Safety and Health inspector who investigated the smaller 2011 fire documented allegations from two workers of corrosion at the refinery.
The 2011 fire took place during a scheduled maintenance shutdown and was quickly extinguished.