Morgan Stanley Sued Over Envestnet’s $4.5 Billion Sale to Bain

Envestnet Inc. directors who presided over its $4.5 billion private equity buyout relied on conflicted bankers who steered them toward an underpriced deal with Bain Capital LP, an unsealed lawsuit said Thursday.

Investors cashed out in the transaction are suing Envestnet’s former board and Morgan Stanley & Co., saying the bank’s “allegiance” to Bain drove a tainted process that shortchanged shareholders in the wealth management software business. The $63.15-per-share sale—which brought in several major asset managers as co-investors, including BlackRock Inc.—closed in November 2024.

“The board ushered Morgan Stanley into the driver’s seat,” letting it “dictate the ...