A week from hell for morgan stanley. First it gets fined $300,000 for failing to stop a trader from entering the wrong order for stocks. How wrong? Well, the order was for $10.8 billion of stocks, not $10.8 million as intended. How dumb is that?
So how does a mistake like that happen? Well, the trader entered an agency order on behalf of the firm to buy 100,000 units of the basket to cover a portion of the short position but the system used to create the basket built in a multiplier of 1,000. When in doubt, just add some more zeroes.
More on that $11 billion debacle in this report here.
Merrill Lynch was also pinged with a $175,000 fine for failing to shoddy recordkeeping with respect to its proprietary trading, reports InvestmentNews.
Morgan Stanley's problems didn't end there. One of its former traders John Steigerwald was censured and barred by a New York Stock Exchange hearing panel for inappropriately trading and earning big commissions from the guardian accounts of injured children. These accounts were set up for kids who were injured at birth or in childhood and subsequently reached medical malpractice settlements. Talk about low life!
More on that from the Houston Chronicle.
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