"Morgan Stanley Settles Block-Trading Probe with $249 Million Fine"

Morgan Stanley and its head of equity syndicate desk, Pawan Passi, have been charged with fraud by the Department of Justice and the SEC for secretly divulging impending block trades to hedge funds from 2018 through 2021, resulting in sellers losing millions of dollars. The bank has been fined $249 million, with Passi facing a $250,000 fine and restrictions on future roles. The U.S. attorney’s office in Manhattan entered into non-prosecution agreements with the bank and Passi, who was dismissed from Morgan Stanley. The bank has agreed to pay the penalties and cooperate with the government’s probe, while stating confidence in the enhancements made to its controls around block trading.