Fine hits Morgan Stanley
The Financial Services Authority (FSA) has fined Morgan Stanley £1.4m and banned one of its traders over mis-marking which forced the bank to make a $120m (£79.2m) negative adjustment in June last year.
Matthew Piper, a former proprietary trader with the firm, was banned from performing any regulated activity and fined £105,000 for deliberately mis-marking positions he traded on behalf of Morgan Stanley. He also hid losses on those positions by manipulating the firm’s trade monitoring systems.
The FSA said Morgan Stanley had failed to employ adequately its controls on the dealing of illiquid financial products and had not properly supervised Piper’s books, leaving it unable to prevent the mis-marking.
The regulator added that the bank should have updated its systems and controls in the face of increased market volatility.