Regulators underestimated value of Morgan Stanley warrants

05/11/2010 | CNNMoney

Herb Allison, an assistant Treasury secretary in charge of the Troubled Asset Relief Program, may have cost taxpayers as much as $375 million when he told Morgan Stanley how much it would cost to repurchase government warrants that were issued after the company's October 2008 rescue. Allison was trying to get more out of the company, but Linus Wilson, an assistant professor at the University of Louisiana at Lafayette, said regulators underestimated the value of those and other warrants. "It seems that the millionaires' club at the U.S. Treasury put investment bankers' interests ahead of taxpayers," said Wilson.

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