Defendant Name: Morgan Stanley & Co. LLC

Defendant Type: Subsidiary of Public Company
Public Company Parent: Morgan Stanley
SIC Code: 6282
CUSIP: 61744644

Document Reference: 34-99336

Document Details

Legal Case Name In the Matter of Morgan Stanley & Co. LLC
Document Name Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
Document Date 12-Jan-2024
Document Format Administrative Proceeding
File Number 3-21825
Allegation Type Broker Dealer
Document Summary On January 12, 2024, the SEC instituted settled administrative and cease-and-desist proceedings against Morgan Stanley & Co. LLC, stating: "This matter involves fraudulent conduct perpetrated by two employees on Morgan Stanley’s Equity Syndicate Desk in the Americas (“Syndicate Desk”) involving large blocks of stock that the investment banking firm purchased from investors."

Disgorgement & Penalty Information

Resolutions
Cease and Desist Order
Censured
The Commission ordered that: "Respondent’s obligation to pay $166,354,821 shall be offset in an amount equal to the value of any assets and funds actually paid pursuant to a forfeiture or restitution order, for the benefit of victims, in the parallel non-prosecution agreement with the USAO for SDNY within 14 days of entry of this Order."
Cooperation Before the Resolution
Remedial Acts or Efforts Before the Resolution
Monetary Penalties:

Disgorgement

Individual:     $138,297,046.00 Shared:    

Civil Penalty

Individual:     $83,000,000.00 Shared:    

Pre-Judgment Interest

Individual:     $28,057,775.00 Shared:    

Related Documents:

2024-6 12-Jan-2024 Press Release--Administrative Proceeding
SEC Charges Morgan Stanley and Former Executive Pawan Passi with Fraud in Block Trading Business; Firm agrees to pay more than $249 million to settle fraud charges and for failing to enforce information barriers
On January 12, 2024, the SEC stated that: ''[It] charged investment banking giant Morgan Stanley & Co. LLC and the former head of its equity syndicate desk, Pawan Passi, with a multi-year fraud involving the disclosure of confidential information about the sale of large quantities of stock known as “block trades.” The SEC also charged Morgan Stanley with failing to enforce its policies concerning the misuse of material non-public information related to block trades."
34-101215 27-Sep-2024 Administrative Proceeding
Order Creating and Consolidating Fair Funds, and Setting Deadline to Submit a Proposed Plan of Distribution
The Commission ordered that: "A. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, the Passi Fair Fund is created so that the civil penalty paid by Passi can be distributed for the benefit of harmed investors; B. . . . the Morgan Stanley Fair Fund is created so that the civil penalty paid by Morgan Stanley can be added to the disgorgement and prejudgment interest paid by Morgan Stanley for distribution for the benefit of harmed investors; C. The Passi Fair Fund is consolidated with the Morgan Stanley Fair Fund for purposes of distribution administration; and D. . . . the Division will submit a Proposed Plan of distribution for the consolidated Fair Fund by February 28, 2025."
34-101317 11-Oct-2024 Administrative Proceeding
Order Appointing Tax Administrator
The SEC ordered that "Miller Kaplan Arase LLP is appointed as the Tax Administrator for the QSF in the above-referenced proceeding."
34-102488 26-Feb-2025 Administrative Proceeding
Notice of Proposed Plan of Distribution and Opportunity for Comment
The Commission stated: "Notice is hereby given . . . that the Division of Enforcement has submitted to the Commission a proposed plan of distribution (the "Proposed Plan") for the distribution of monies paid in the above-captioned matters."

Related Actions:

In the Matter of Pawan Kumar Passi
Pawan Kumar Passi