Nikada
Morgan Stanley (NYSE:MS) agreed to pay $2M to settle an investigation by the Massachusetts securities regulator into the trading of First Republic Bank stock by a First Republic insider before it failed in 2023.
Morgan Stanley (MS) neither admitted nor denied the violations outlined in the consent order.
From Feb. 22, 2022, through March 7, 2023, Morgan Stanley (MS) effected sales of First Republic stock worth $6.82M in a customer’s account, identified as Customer One. The Wall Street Journal said its then-executive chairman’s trades matched the details in the consent order.
The consent order alleged that Morgan Stanley (MS) didn’t have a specific process to review trades of insiders of FDIC-regulated institutions and that it failed to conduct a “reasonable” post-trade review of the customers’ sales.
A Morgan Stanley (MS) spokesperson said via email to Seeking Alpha, “We are pleased to resolve this matter.”
In addition to the $2M payment, the firm was ordered to end practices that violate regulations, to conduct an internal review and make recommendations regarding relevant policies and procedures, and submit a written review to the Massachusetts Securities Division.
