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Morgan Stanley Accused of Misusing Data in Short Selling

Morgan Stanley used inside information about Russian tycoon Oleg Deripaska’s $1.5 billion investment in an auto-parts maker to illegally profit from its own short selling, the billionaire’s lawyer told a New York jury.

Deripaska, owner of United Co. Rusal Plc, the world’s biggest aluminum producer, sued Morgan Stanley and the lender on the deal, BNP Paribas SA, claiming they derailed his 20 percent stake in Magna International Inc. at the peak of the financial crisis and cost him at least $900 million. Paris-based BNP Paribas loaned Deripaska most of the money for the investment, with his Magna shares held as collateral.

The trial, which started Monday in Manhattan federal court, is only against New York-based Morgan Stanley, after BNP Paribas was dismissed as a defendant. The financial services firm had been hired by BNP Paribas to sell Deripaska’s shares in the event of a margin call, which was made in September 2008, when Magna’s stock began to plunge.

Morgan Stanley contends its disposal of the shares...