Morgan Stanley to Settle Block-Trading Probe with Up to $300 Million
Quiver Quantitative — Morgan Stanley (MS) is nearing a settlement of between $200 million and $300 million to resolve a U.S. investigation into its handling of large stock sales, known as block trades. This long-standing probe, which scrutinized the bank's practices that could significantly impact market prices, is set to conclude without criminal charges against the bank. The agreement, which involves federal prosecutors in Manhattan and the Securities and Exchange Commission (SEC), is expected to be announced soon. The penalty will be shared between the Justice Department and the SEC, marking a relief for investors who feared more severe repercussions for one of Morgan Stanley’s key units.
The investigation delved into whether Morgan Stanley employees mishandled information about impending large-scale stock transactions, potentially violating securities laws. This scrutiny extended to the bank's internal controls and their effectiveness in preventing potential abuses. The probe's intensity led to significant personnel changes within the bank, including the departure of the head of its U.S. equity syndicate desk, Pawan Passi, and one of his team members. These developments occurred as Morgan Stanley prepares to report its fourth-quarter results, underlining the probe's impact on the bank’s operations.
Market Overview: -Morgan Stanley reaches a near-$300 million settlement with US authorities to resolve a years-long probe into its handling of block trades. -No criminal charges for the bank, but the investigation rattled clients and exposed potential systemic flaws in information sharing practices. -This outcome marks a partial vindication for Morgan Stanley, avoiding the severe sanctions initially feared.
Key Points:
Read more on investing.com
