Wednesday, January 27, 2021

Morgan Stanley Faces €25m Fine for Market Manipulation

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French market regulator accuses Morgan Stanley of manipulating European bond markets to avoid making large losses on its trades.

According to FT, the bank’s London trading desk bought futures contracts on French and German debt in June 16 2015, in order to drive up the price of eurozone debt, before selling more than €1bn of French and Belgian bonds, an official from the French markets regulator told a hearing in Paris on Friday.

Autorité des Marchés Financiers’ investigation shows Morgan Stanley’s traders aggressively intervened in the market as it approaches its $20m risk limit. The traders raise the price of futures to “abnormal and artificial levels”. The regulator said “The desk massively dumped its risk on other market participants and took them by surprise,”

AMF seeks €25m fine for Morgan Stanley market manipulation techniques, which the regulator compared to Citigroup’s “Dr Evil” trade activities in 2014.

Morgan Stanley rejects AMF market manipulation allegations.

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