Morgan Stanley Is Expected To Resolve Block Trade Investigation With Multi-Million Dollar Payment

A Bloomberg report from Thursday indicated that Morgan Stanley MS is anticipated to pay $200 million to $300 million to resolve the longstanding U.S. investigation into the handling of large-scale block trades by its employees.

What To Know: According to the report, the agreement to pay the amount may be announced in the coming days. The Justice Department and the SEC will deliver the punishment, however the bank will not face any criminal charges.

The probe has had widespread implications, impacting large clients and the one of the bank's valued units, as well as causing ripples in the industry.

The block trades in question were investigated to discern whether employees shared or misused information in illegal ways. Additionally, regulators assessed if the bank had sufficient internal controls in place to prevent such actions.

It is also alleged that the company caused stock prices to fall before completing a block trade, which could lead to the bank facing possible civil liability.

While it is uncertain what penalties any individuals will face going forward, the firm did discharge Pawan Passi, the head of its U.S. equity syndicate desk.

The news comes days ahead of the company's fourth-quarter financial results, scheduled for Jan. 16. Earnings are anticipated to be $1.01 per share and revenue estimated to be $12.74 billion.

MS Price Action: Shares of Morgan Stanley were down 1.06% at $90.51 at the close of the market, according to Benzinga Pro.

Image by Oleg Gamulinskii from Pixabay