NU Online News Service, July 7, 2:12 p.m. EDT

Allstate Corp. has added to its tally of New York lawsuits seeking to recover investment losses on residential mortgage-backed securities with a filing against Morgan Stanley.

“We allege that the offering documents contained untrue statements and omitted material facts,” says Allstate in an email.

The Northbrook, Ill.-based insurer has filed similar lawsuits against Countrywide, Citigroup, Deutsche Bank, Credit Suisse, Merrill Lynch and J.P. Morgan Chase.

In each lawsuit Allstate seeks damages, including rescission, monetary losses, attorneys’ fees, other costs and interest.

This most recent lawsuit, filed July 5 in state Supreme Court in Manhattan, alleges that between 2005 and 2007, Allstate bought more than $104 million in mortgage-backed securities from Morgan Stanley and its affiliates, which misrepresented the quality of the mortgages.

Allstate says Morgan Stanley assured the company that it had conducted due diligence on the mortgage originators and the loans issued before Morgan Stanley purchased them for securitization, according to court documents.

“In truth, the originators whose loans collateralized the Morgan Stanley [residential mortgage-backed securities] purchased by Allstate were among the worst of the worst culprits in the subprime lending industry,” alleges Allstate in the suit.

A handful of the mortgage originators have filed for bankruptcy, been shut down, and are the subject of private lawsuits and investigations by the government, Allstate says.

Additionally, interviews Allstate did with former Morgan Stanley employees reveal that the global financial-services firm “was well aware of the poor quality of the loans it purchased, securitized and sold to Allstate,” according to the complaint.

Allstate’s suit against J.P. Morgan Chase & Co. is over more than $750 million in mortgage-backed securities purchased. The insurer has another lawsuit against Bank of America’s Countrywide Financial Corp., seeking damages related to its purchases of more than $700 million in mortgage-backed securities from the company.