Authorities have spent more than four years investigating whether Morgan Stanley improperly tipped off favored hedge-fund clients to big blocks of stock coming on the market. The bank fired several employees and pulled back from the block trading business, losing market share to rivals.
A possible settlement with Justice Department and Securities and Exchange Commission would involve a fine of between $500 million and $1 billion, people familiar with the matter said. Morgan Stanley would also admit that it didn’t properly oversee its employees and commit to specific compliance changes, but likely wouldn’t have to plead guilty to a crime, avoiding a major black mark on a record that’s been cleaner than rivals’.
‘Enforcement 40’ for 2020
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