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The Big Take

The King of Block Trades Is Entangled in a U.S. Probe of Morgan Stanley

Frank Fu, whose firm achieved a 76% return its first year, wields billions to help banks unload stock. The U.S. is examining those symbiotic relationships.

Block trading is one of the last bastions of old Wall Street, where big slugs of stock are sold through person-to-person negotiation, even cajoling, rather than electronic venues.

Block trading is one of the last bastions of old Wall Street, where big slugs of stock are sold through person-to-person negotiation, even cajoling, rather than electronic venues.

Photographer: Michael Nagle/Bloomberg
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When Frank Fu, a Cornell-educated engineer, opened his own hedge fund two years ago, he picked an unlikely niche for an introvert.

His CaaS Capital Management would focus on block trading, one of the last bastions of old Wall Street, where big slugs of stock are sold through person-to-person negotiation, even cajoling, rather than electronic venues. Many practitioners are bro-y -- the type who played college football. For Friday happy hours, Fu’s colleagues unzip their CaaS puffer vests and break out chess boards in a conference room.