Morgan Stanley Paid More Than $249 Million to Settle SEC Block-Trade Fraud Charges
Company: Morgan Stanley
Summary
In January 2024, the U.S. Securities and Exchange Commission charged Morgan Stanley & Co. LLC with a multi-year fraud involving confidential information about large stock sales known as block trades. The SEC found that from at least June 2018 through August 2021 Morgan Stanley employees disclosed non-public, potentially market-moving information about impending block trades to selected buy-side investors despite sellers' confidentiality requests. Those investors could use the information to pre-position ahead of the trades. The SEC also found failures in Morgan Stanley's information barriers. Morgan Stanley agreed to approximately $138 million in disgorgement, approximately $28 million in prejudgment interest and an $83 million civil penalty. A parallel Justice Department resolution required more than $153 million in financial penalties, with offsets between the resolutions. Sources: U.S. Securities and Exchange Commission https://www.sec.gov/newsroom/press-releases/2024-6 U.S. Department of Justice https://www.justice.gov/usao-sdny/pr/us-attorney-announces-agreements-morgan-stanley-and-former-senior-employee-pawan-passi