Morgan Stanley discloses investigation into block trading activities


Feb. 24 (Reuters) – Morgan Stanley (MS.N) said on Thursday that U.S. regulators and prosecutors were investigating various aspects of the investment bank’s block trading business.

The disclosure in a regulatory filing follows reports that the U.S. Securities and Exchange Commission (SEC) is investigating whether financial executives may have breached rules by advising hedge funds ahead of big stock sales, known as “block transactions”.

The SEC is investigating Morgan Stanley and Goldman Sachs (GS.N), as well as the US Department of Justice, Reuters reported last week, citing a source with knowledge of the matter. Read more

Join now for FREE unlimited access to Reuters.com

Register

The bank said Thursday that since June 2019, it has been responding to requests for information from the SEC regarding the investigation into various aspects of its block trading business.

Morgan Stanley has also said since August last year that it has been responding to requests for information from the US Attorney’s Office for the Southern District of New York as part of its investigation.

Brokers frequently buy and sell blocks of shares, either on behalf of clients or as part of a hedging strategy, that are large enough to move a company’s share price.

Block trading tends to increase in times of volatility as institutional investors rebalance their portfolios.

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Noor Zainab Hussain in Bengaluru; Editing by Maju Samuel

Our standards: The Thomson Reuters Trust Principles.

Previous How the tech industry is reacting to the Russian invasion of Ukraine
Next Barco, Cook Medical, Eschmann Equipment, Ge Healthcare, Johnson & Jo – ZNews Africa