Morgan Stanley agreed Friday to pay $249 million to settle criminal and regulatory investigations into allegations that some employees improperly shared information about clients’ stock sales, the Manhattan U.S. attorney’s office said. Block trades occur when a large shareholder, such as a private-equity firm, wants to sell a swath of stock at once. In the years leading up to the probe, Morgan Stanley was the dominant bank in block trading. The bank’s civil fraud settlement with the SEC says Passi’s communications with investors reduced Morgan Stanley’s risk in purchasing block trades. Morgan Stanley put Passi on leave in November 2021 and discharged him the following year, according to Financial Industry Regulatory Authority records.

Source: Wall Street Journal January 12, 2024 15:42 UTC