Disgorgement & Penalty Information
Resolutions
Cease and Desist Order
The Commission ordered that: "the Proposed Plan is approved, and the approved Modified Plan of Distribution shall be posted simultaneously with this order on the Commission’s website at www.sec.gov."
Fair Funds
Plan of Distribution
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:
34-99336
12-Jan-2024
Administrative Proceeding
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
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."
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."
34-102488-dist-plan
26-Feb-2025
Administrative Proceeding
Proposed Plan of Distribution
The commission stated: "The Division of Enforcement submits this Proposed Plan of Distribution (the "Plan") to the United States Securities and Exchange Commission (the "Commission") pursuant to Rule 1101 of the Commission's Rules on Fair Fund and Disgorgement Plans (the "Commission's Rules"), 17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair Fund (the "Morgan Stanley Fair Fund") comprised of disgorgement, prejudgment interest, and civil money penalties paid by Morgan Stanley & Co. LLC ("Morgan Stanley") and Pawan Kumar Passi ("Passi" and collectively with Morgan Stanley, the "Respondents") pursuant to the Orders the Commission issued in the above-captioned matters."
Modified Plan of Distribution
The Commission stated that "the Plan seeks to compensate investors (the "Selling Shareholders") for losses on their sales of blocks of shares of the Securities, as defined below, in the transactions listed on Exhibit B to the Plan (the "Transactions") resulting from the conduct described in the Orders, as calculated using the methodology detailed in the Plan of Allocation (attached as Exhibit A) . Based on records and expert analysis obtained by the Commission staff during and after its investigation, the Commission staff has identified the harmed investors and has calculated each investor's harm."
