Morgan Stanley orders internal lawyer to supervise block trading desk- FT

In February, the Wall Street bank said that U.S. regulators and prosecutors were probing L4N2UZ6Z5 various aspects of its block trading business.

The banks disclosure in February followed reports that the U.S. Securities and Exchange Commission (SEC) was investigating whether financial executives had broken rules by tipping off hedge funds ahead of large sales of shares, known as “block trades”.

The decision to install the lawyer on the desk was made after the firm placed Pawan Passi, head of the U.S. equity syndicate desk, on leave last year, the FT reported.

The bank last week placed a second member of the equity syndicate desk, Charles Leisure, on leave, the report added, citing people familiar with the matter.

Morgan Stanley did not immediately respond to a Reuters request for comment.

The bank‘s role in the collapse of Archegos Capital Management has deepened a probe by U.S. authorities into Wall Street’s lucrative market for block trades.

The investment bank lost nearly $1 billion last year when Bill Hwangs Archegos failed to meet margin calls, forcing several investment banks including Morgan Stanley to attempt recouping losses by liquidating shares and assets.