Morgan Stanley sues Peak Ridge

Morgan Stanley yesterday sued Peak Ridge Capital Group's commodities hedge fund, alleging that the fund failed to cover more than $40m in losses stemming from bad bets on natural gas.

Morgan Stanley contends it suffered the losses in connection with the Peak Ridge Commodities Volatility Master Fund, after Peak Ridge failed to maintain proper margin requirements and went into default. The lawsuit, filed in the US, said Morgan Stanley had tripled the margin requirements for Peak Ridge over just 10 months.