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Morgan Stanley (New York: MS) agreed to pay $2 million to settle a Massachusetts securities regulator’s investigation into trading in First Republic Bank shares by a bank insider before its 2023 failure.
Morgan Stanley (MS) did not acknowledge He did not deny the violations set forth in the consent order.
From February 22, 2022 through March 7, 2023, Morgan Stanley (MS) executed sales of First Republic shares totaling $6.82 million into a client account, identified as Client First. Wall Street Journal He said Its CEO’s dealings at the time matched the details in the consent order.
Consent to request Morgan Stanley (MS) alleged that it did not have a specific process in place to review insider trades at FDIC-regulated institutions, and that it failed to conduct a “reasonable” post-trade review of client sales.
“We are pleased to have resolved this matter,” a Morgan Stanley spokesperson told Seeking Alpha via email.
In addition to the $2 million payment, the court ordered the company to end the practices that violated the regulations, conduct an internal review and make recommendations on relevant policies and procedures, and submit a written review to the Massachusetts Securities Division.
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