Morgan Stanley has agreed to pay $249.4 million in financial liability for making false statements about block trading practices.
In this case, an agreement has been reached that ends a multi-year government investigation. Charges of deception, fraud, and ignoring the norms of American law are being dropped. The financial institution resolves its legal problems after several years of litigation.
The US Securities and Exchange Commission (SEC) and the Manhattan Attorney’s Office investigated the so-called block trades that Morgan Stanley carried out on behalf of clients.
The financial institution admitted that between 2018 and 2021 it gave false statements about the specified trades. The bank also stated that its corporate policy has since been improved.
The total amount of payments made by the financial institution includes penalties to the Justice Department and the SEC, restitution, and forfeiture of ill-gotten gains.
The Justice Department has agreed to end the prosecution of the bank in court. The prosecution of Pawan Passi, the former head of the bank’s US equity syndicate desk, who confessed to involvement in illegal activities between 2018 and 2021, was also postponed.
Passi’s lawyer expressed satisfaction that the prosecutor’s office did not insist on a criminal conviction, noting that the agreements allowed the client to survive two very difficult years of intensive government control over the practice of block trading on Wall Street.
Pawana Passi admitted that promised the sellers of the blocks of shares to keep the confidentiality of information about operations, initially knowing that this information would be available to third parties.
As we have reported earlier, South Korea Fines Global Banks for Illegal Naked Short Selling.
