Amid Federal Probes, Morgan Stanley's Internal Lawyer To Oversee Block Trading Desk

Morgan Stanley MS has ordered one of its internal lawyers to be on its U.S. equity syndicate desk to supervise bankers and answer their legal questions, the Financial Times reported citing people briefed on the arrangement.
The decision follows after Morgan Stanley placed Pawan Passi, head of the U.S. equity syndicate desk, on leave last year, as the unit landed into a federal investigation for block trading.
Block trades are bulk sales of shares executed by an investment bank, generally for a client, which tend to be big enough to move markets. The U.S. authorities are investigating whether investors obtained a warning of any trades.
Morgan Stanley last week placed a second member of the equity syndicate desk, Charles Leisure, on leave, according to people familiar with the matter. Neither Passi nor Leisure have been accused of any wrongdoing.
Increased scrutiny of block trading has emerged as one of the leading legal risks faced by Wall Street banks, along with a separate investigation into bankers’ use of personal mobile phones to communicate with clients and counterparties.
Price Action: MS shares closed at $85.50 on Monday.
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