Morgan Stanley Among Block-Trading Firms Facing U.S. Probe
- SEC and Justice Department have sought information from firms
- Inquiries look at how market-moving transactions are executed
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U.S. authorities are scrutinizing how Wall Street firms including Morgan Stanley handle block trades, as part of a long-running probe into stock transactions typically big enough to move markets, according to people with direct knowledge of the matter.
The behind-the-scenes inquiry has been looking into how banks execute the trades with help from outside market makers, the people said. The Securities and Exchange Commission began investigating in 2018, and after initial inquiries and what appeared to some outsiders as a lull in the case, officials sought more information, with the Justice Department opening its own probe, the people said. It’s unclear what evidence prompted the additional inquiry.