Morgan Stanley has agreed to pay $5 million to settle federal regulators’ charges of violating competition rules in futures trades and inaccurately reporting trades to exchanges.
Morgan Stanley has been pushing its FX offering and recently overtook Goldman Sachs in the annual Euromoney FX Survey. Morgan Stanley offers it Matrix SDP platform for trade execution and research.
The Commodity Futures Trading Commission announced the settlement Tuesday with the big investment firm. Futures trades generally must be executed on exchanges.
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The agency said Morgan Stanley reported futures trades it made away from exchanges as meeting legal requirements for exceptions to that rule. In fact, trades from April 18, 2008, through Oct. 29, 2009, didn’t fulfill the requirements, the CFTC said.
Morgan Stanley’s internal controls and supervision procedures were inadequate to detect and prevent the improper trading, the CFTC said.
Morgan Stanley’s share price closed at $12.86.
Morgan Stanley said in a statement that the trades in question were initiated by one former salesperson. The company said it made an internal investigation and has improved its internal controls. The CFTC didn’t find that any customers were harmed or that the trades were made at unreasonable prices, Morgan Stanley noted.