West Virginia v. Morgan Stanley

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Dr. Allan Kleidon testified on behalf of the defense regarding the use, valuation, and trading of derivatives.

Retained by Davis Polk & Wardwell

Dr. Allan Kleidon testified on behalf of the defense regarding the use, valuation, and trading of derivatives. The plaintiff claimed that certain derivatives transactions were ultra vires and sought compensatory and punitive damages. Testifying on behalf of Morgan Stanley, Dr. Kleidon showed that the sale of put options by West Virginia was not incompatible with the objective of hedging West Virginia’s portfolio. After a lengthy trial in which the judge ruled against Morgan Stanley on liability, the jury awarded minimal damages. On appeal, the West Virginia Supreme Court reversed the lower court ruling against Morgan Stanley. The case settled.

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Allan W. Kleidon

Senior Vice President