Morgan Stanley fined $1 million over bond pricing violations

The headquarters of Morgan Stanley is seen in New York January 9, 2013.

Credit: Reuters/Shannon Stapleton

By Sarah N. Lynch

WASHINGTON | Thu Aug 22, 2013 10:20am EDT

WASHINGTON (Reuters) - Morgan Stanley will pay a $1 million fine and compensate harmed investors to settle civil charges that the bank failed to give customers the best market prices for some corporate and municipal bonds, U.S. brokerage regulators said on Thursday.

The Financial Industry Regulatory Authority said Morgan Stanley Smith Barney LLC and Morgan Stanley & Co would pay the fine plus roughly $188,000 in restitution for the various pricing violations, which occurred between January 2008 through September 2011.

The bank agreed to settle the case without admitting or denying the charges by FINRA, which self-polices the brokerage industry.

Morgan Stanley spokesman James Wiggins said the company had cooperated with FINRA's investigation.

"The settlement involved fewer than 300 fixed income transactions over a four-year period during which some 4 million such trades were conducted," Wiggins said. "FINRA did not allege any willful or fraudulent conduct by the firm."

According to FINRA, Morgan Stanley failed to use "reasonable diligence" to ensure that prices were fair under current market conditions in 116 corporate bond transactions.

In addition, FINRA said it found that the bank did not reasonably price 165 different municipal bond trades.

"Firms must ensure that customers who buy and sell securities - including corporate, agency, and municipal bonds - receive execution prices that are consistent with prices available in the marketplace," said Thomas Gira, the executive vice president for FINRA Market Regulation.

(Reporting by Sarah N. Lynch; Editing by Lisa Von Ahn)

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Goldman, Morgan Stanley in talks to buy stake in China's Huarong: FT

A visitor walks past the bank's logo prior to Deutsche Bank's annual news conference in Frankfurt February 2, 2012.

Credit: Reuters/Kai Pfaffenbach

HONG KONG | Fri Aug 16, 2013 5:28am EDT

HONG KONG (Reuters) - Deutsche Bank, Goldman Sachs (GS.N) and Morgan Stanley have held talks with China's Huarong Asset Management Corp to invest in its $1.5 billion stake sale ahead of the company's expected initial public offering next year, the Financial Times reported.

The interest of foreign banks in Huarong comes amid looming concerns of a surge in bad loans across China. A spike in non-performing loans would increase the demand for the services of China's asset management companies.

Huarong, established in 1999, is the biggest of the four funds that China's government set up to remove an estimated 1.4 trillion yuan ($230 billion) worth of bad loans from the country's top four state lenders.

Setting up these asset management companies allowed China's top four banks to shed their bad loans book and to list shares publicly, beginning roughly eight years ago.

Goldman Sachs, Morgan Stanley (MS.N) and Deutsche Bank (DBKGn.DE) declined to comment. Huarong could not be reached immediately.

Huarong plans to raise up to $2 billion by selling a stake of 15-20 percent, Reuters reported in June. The fund raising would set the table for an IPO, in a move similar to what Cinda Asset Management Corp, another bad loan vehicle created by China, is doing.

The FT, citing people close to the Huarong process, said in its report on Friday that the company would pursue a Hong Kong listing.

Huarong manages over 300 billion yuan of assets, and its net profit jumped 66 percent in 2012 to 6.96 billion yuan, according to its annual report.

Cinda raised $1.6 billion last year from investors including China's National Social Security Fund, Standard Chartered (STAN.L) and UBS (UBSN.VX). It has also started working on its IPO process.

(Reporting by Denny Thomas; Editing by Michael Flaherty and Himani Sarkar)

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This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Goldman, Morgan Stanley in talks to buy stake in China's Huarong: FT

A visitor walks past the bank's logo prior to Deutsche Bank's annual news conference in Frankfurt February 2, 2012.

Credit: Reuters/Kai Pfaffenbach

HONG KONG | Fri Aug 16, 2013 5:28am EDT

HONG KONG (Reuters) - Deutsche Bank, Goldman Sachs (GS.N) and Morgan Stanley have held talks with China's Huarong Asset Management Corp to invest in its $1.5 billion stake sale ahead of the company's expected initial public offering next year, the Financial Times reported.

The interest of foreign banks in Huarong comes amid looming concerns of a surge in bad loans across China. A spike in non-performing loans would increase the demand for the services of China's asset management companies.

Huarong, established in 1999, is the biggest of the four funds that China's government set up to remove an estimated 1.4 trillion yuan ($230 billion) worth of bad loans from the country's top four state lenders.

Setting up these asset management companies allowed China's top four banks to shed their bad loans book and to list shares publicly, beginning roughly eight years ago.

Goldman Sachs, Morgan Stanley (MS.N) and Deutsche Bank (DBKGn.DE) declined to comment. Huarong could not be reached immediately.

Huarong plans to raise up to $2 billion by selling a stake of 15-20 percent, Reuters reported in June. The fund raising would set the table for an IPO, in a move similar to what Cinda Asset Management Corp, another bad loan vehicle created by China, is doing.

The FT, citing people close to the Huarong process, said in its report on Friday that the company would pursue a Hong Kong listing.

Huarong manages over 300 billion yuan of assets, and its net profit jumped 66 percent in 2012 to 6.96 billion yuan, according to its annual report.

Cinda raised $1.6 billion last year from investors including China's National Social Security Fund, Standard Chartered (STAN.L) and UBS (UBSN.VX). It has also started working on its IPO process.

(Reporting by Denny Thomas; Editing by Michael Flaherty and Himani Sarkar)

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