California attorney general may sue Morgan Stanley by Benjamin Snyder @FortuneMagazine August 5, 2014, 7:04 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Morgan Stanley said that California’s attorney general may sue the bank for allegedly misrepresenting its mortgage bonds before the financial crisis took place. In a regulatory filing on Tuesday, the bank said California’s attorney general “believes the company’s conduct violated California law and that it may seek treble damages, penalties and injunctive relief.” The bank was made aware of this on May 8, 2014, according to the document. In the filing, however, the bank said that it “does not agree with these conclusions and has presented defenses” to the attorney general. The misrepresentations, according to the document, come from an investment vehicle called Cheyne Finance, which went bankrupt in 2007. California’s state pension fund, also called CalPERS, bought $1.3 billion of the vehicle, according to Reuters.