E*Trade and Morgan Stanley are facing a class action lawsuit that accuses them of automatically transferring uninvested customer funds to affiliated banks offering minimal returns. The suit alleges that these transfers, which result in accounts with unreasonably
low interest rates, were not adequately disclosed to customers. This action reflects a growing trend of legal challenges targeting banks for similar practices involving uninvested cash balances.
This lawsuit was reported by Law.com Radar, which offers real-time updates on litigation across more than 2,600 state and federal courts.