NEW YORK, May 17 (UPI) -- A Florida jury has socked Morgan Stanley with an order to pay $604.3 million to an investor defrauded by the big New York bank.
And things could get worse for Morgan Stanley: If jurors decide to give punitive damages to billionaire financier Ronald Perelman, the total award could reach nearly $2.5 billion, the Wall Street Journal reported.
Arguments on punitive damages were set to begin Tuesday.
The jury found the investment bank defrauded Perelman, who runs cosmetics giant Revlon Inc., when he sold camping-gear maker Coleman Inc. to Sunbeam Corp. in 1998. Specifically, jurors found Perelman relied on statements made by Morgan Stanley when he sold his stake in Coleman to the investment bank's client, Sunbeam, for $1.5 billion in stock and cash.
Shortly thereafter, an accounting scandal engulfed Sunbeam, which then filed for bankruptcy.
Morgan Stanley, which plans an appeal, rejected a 2003 offer from Perelman to settle for $20 million.
