Morgan Stanley Says Trading Probes Are Scrutinizing Information Sharing

Morgan Stanley disclosed more detail about the probes into its trading business by US regulators that are examining the sales of large blocks of stock.

(Bloomberg) — Morgan Stanley disclosed more detail about the probes into its trading business by US regulators that are examining the sales of large blocks of stock.

The investigations are focused on whether employees shared or used information regarding impending block transactions in violation of securities regulations, the New York-based bank said Friday in a filing. The probes are being handled by the Securities and Exchange Commission and the US Attorney’s Office for the Southern District of New York.

The firm has discharged two bankers who had been put on leave in relation to the issue. Morgan Stanley said the move was tied to allegations about their communications about impending block trades and client activity.

Morgan Stanley disclosed the investigations last year, and said that it faces potential civil liability from allegations that it caused stock prices to drop before completing a block trade. The bank said it continues to cooperate with the investigations.

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