Now Morgan Stanley (MS) Under Scrutiny

Federal prosecutors are now looking into an alleged malpractice by Morgan Stanley MS with regards to one of its mortgage-backed-securities deals, referred to as ‘The Dead Presidents’ by traders. The Wall Street Journal, citing people close to the situation, has reported that investigators are examining whether Morgan Stanley had bet against the deal that it structured. The investigations are in very preliminary stages. The firm said that it has not been contacted by any government agencies in regards to the said deals and has no knowledge of such investigation. Shares of Morgan Stanley were down by 4.40% to $27.13 in early trading in New York today.