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00:00It's like the sun coming up in the east. You can understand that any criminal or civil litigation. There are events down the road where you go after the big fish. That is what has happened this morning with the publication pressured an entourage an hour banking senior reporter which barely describes his expertise on New York and global Wall Street and Morgan Stanley. And Mr. Wang argued goes sort of thank you so much for joining us this morning. Through this is about a Hong Kong I called a conglomerate whatever online trading or whatever. The stock doesn't matter. And Bill Wang of Argos who's got a guy who's dealing with Morgan Stanley and it goes the wrong way for Mr. Wang is he's suing Morgan Stanley here. Well we're letting the beans out. Let's let's take a step back. We all know what happened with our key goals and rate Wong just last month. Criminal charges against Bill Huang for the spectacular collapse of his family office. But in a new untold chapter of that collapse months before his liquidation there was another big short bed that he had on a stock food to which is the Chinese steak and Robinhood. And he sought Morgan Stanley's help to get out of that position. But soon after that he was caught in one epic short squeeze. The stock jumped 400 percent and he lost nearly four billion dollars. At least his portfolio took a small billion dollar cut to the chase. This is not Martha Stewart or anybody else on insider trading where it's pretty much cookie cutter. Don't you just go back and look at the e-mails. Look at the transcripts. That or is this about more clandestine studies within the court system. And that's where it gets interesting. We have no indication that at the time this happened that arc goes really even thought there was anything a mess or anything that the Morgan Stanley bankers could have done differently. But since the emergence of the block trading probe by the Justice Department the other major Wall Street targeted probe from the DOJ it appears as if they are legal. Steam has told the Justice Department or at least authorities that they should review the transaction and see if Morgan Stanley bankers were indiscreet. There could be more innocent explanations. Food could just have been caught up in the retail trading frenzy when an army of investors were targeting massively shorted stocks. But at the very least from what we understand is Bill Long and giggles want the Justice Department want the other authorities were looking into it to review the transaction and to make sure everything was on the up and up. So there is a distinction between punting blame and actually casting liability and what is the potential liability for Morgan Stanley. So that bill can be proven correct. And that's where we go in a completely separate track. We know about the cargo spill but we also know that Morgan Stanley is the only major Wall Street institution that has come out and said that it is facing a probe into its bloc trading practices. It has even said that it faces potential civil liability. If some of those people making claims against them are proven to be right where they will have to pay up on their end. There is no indication we have right now that the Justice Department is even taking the cargos claim seriously enough to go knocking on Morgan Stanley's doors. But the numbers do paint quite a stark picture and it behooves another look at least NASDAQ. Is it fair sorry to dovetail this particular probe to a wider issue where you're seeing WhatsApp communication cell phone contact all of these individual types of services being probed by the banks themselves trying to keep track of what their employees are doing at home so they can better deal with regulators in this kind of scenario. How connected is some of that. There's no doubt we're living in the regime of the everything crackdown. Clearly the prosecutors the DOJ the S.E.C. there is a change in mindset at least from the era of the Trump administration. And they're going hard after Wall Street on a number of fronts. Whether that's looking into every aspect of our cargos the block trading probe the rights are probe short selling. They're on it and they're all over it. Remember the triple Overstock cash flow. And so you know if I buy 100 shares of Home Depot I guess nobody cares if I own one point seventy three five million Wal-Mart and I want to unload two hundred sixty six thousand shares. How do I do that. You won't be able to do it discreetly. Dumps a better make sure you pick your bank as a very CAC. You know this is critical folks. I set you up for this. You know I did. You know going into your sell or buy of a block trade that's going to be visible and well you're out at a park. You know that the bankers will have to canvas the market. And that's part of the challenge here. A lot of the professionals will tell you when bankers go about their task maybe there isn't any other way for them to do this. There are only so many restrictions they can place. And people that conversing with. Exactly. And that's why the Justice Department may have a tough case to make against Morgan Stanley in the first place. Thank you.

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New Chapter in the Bill Hwang Saga

Bill Hwang wants authorities to take a closer look at Morgan Stanley. Bloomberg's Sridhar Natarajan reports on "Bloomberg Surveillance." (Source: Bloomberg)

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