Labels: David Connor Redmond, Morgan Stanley

Labels: auction rate securities, JPMorgan, Morgan Stanley, New York AG, Wachovia

Labels: ING, insider trading, Morgan Stanley

"The investigation began as routine probe of suspicious high-volume trading prior to the acquisition of Catellas Development," said Friestad. The probe led to Eric Franklin, a hedge fund manager for Q Capital Investment Partners, LP, a Delaware limited partnership with offices in Fort Lee, N.J. "We linked those trades to Mr. Franklin and obtained trading records for Q Capital, and Mr. Franklin's own records for his personal account, and noticed that what they had in common was Morgan Stanley as the investment banker. We also noticed that a lot of the trading preceded upgrades and downgrades issued by UBS [Union Bank of Switzerland] and then the whole scheme began to unravel."

Labels: Andover Brokerage, Assent LLC, Banc of America, Bear Stearns, Catellas Development, Chelsea Capital, insider trading, Jasper Capital, Morgan Stanley, Q Capital, SEC, UBS

Labels: disclosure of evidence, Morgan Stanley, NASD, SEC

Labels: Ballena Capital, FSA, GLG, hedge fund, Jabre Financial Service, Morgan Stanley, Philippw Jabre

Labels: Gary Aguirre, John Mack, Morgan Stanley, Pequot Capital

Morgan Stanley, Goldman Sachs Group Inc. and 11 other securities firms have been accused in a lawsuit of conspiring to rig the fees charged to short sellers...

...In a class action filed in federal court New York on Dec. 1, two short sellers claimed that the 13 firms conspired to charge excessive fees for certain ``hard-to-borrow'' stocks, in violation of antitrust laws. The defendants locate, borrow and deliver stocks involved in most short sales, the complaint said.

The firms "orchestrated a massive scheme whereby they have combined and conspired to raise, fix, and maintain, at artificially inflated levels, the fees paid by plaintiffs,'' the complaint said...

...Plaintiffs Forza Capital Management LLC of Bend, Oregon, and BHL Capital Partners LP of Westport, Connecticut, who are represented by Milberg Weiss Bershad & Schulman, are seeking unspecified damages...

Labels: Melvyn Weiss, Milberg Weiss, Morgan Stanley

Labels: Morgan Stanley, Pequot Capital

Labels: Arthur Samberg, GAO, Gary Aguirre, Morgan Stanley, Pequot Capital

Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

Labels: Arthur Samberg, Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

SEC Lawsuit Against Morgan Stanley: $15 Million Penalty

Patricia Shehan
All Headline News Contributor
May 10, 2006

Washington D.C. (AHN) - A news release Wednesday announced that the U.S. Securities and Exchange Commission (SEC) has filed a civil injunction against Morgan Stanley and Co., Inc. for failure to produce e-mails in the tens of thousands during investigations dating from 2000 through 2005. The SEC alleged Morgan Stanley did not search diligently for the tapes or their back-up tapes. The SEC suit against Morgan Stanley calls for a $15 million penalty and required company reforms, subject to court approval. This law suit comes on the heels of another lawsuit being sought by a Florida law firm for $100 million in damages from the Wall Street firm filed the first week of May.

Labels: Morgan Stanley

Hedge fund activism seen rising

April 6, 2006
Reuters

Powerful hedge fund investors will increasingly seek a bigger say in the running of companies they invest in, says Sid Shamnath, an investment manager for Titanium Capital. Shamnath, a manager of Titanium's Global Event Driven Arbitrage Fund, said on Wednesday some of the large hedge funds had less freedom than their smaller rivals to take and exit positions and so needed to take a longer term view of their investments, prompting greater interest in company strategy.

"Large funds, like those managing something like 4 billion dollars, need to take a longer-term view ... and need longer lock-up periods for investors," Shamnath said at the Reuters Hedge Funds and Private Equity Summit in London...

...Some relationships between companies and hedge funds have already turned sour. The Children's Investment Fund, for example, helped orchestrate the removal of Deutsche Boerse's chairman Rolf Breuer and chief executive Werner Seifert to register their disapproval of the Frankfurt bourse operator's attempt to buy the London Stock Exchange.

Brian Magnus, co-head of UK Investment Banking at Morgan Stanley, said shareholder activism was a "weathervane of the state and maturity of capital markets". "Shareholder activism had been confined to the UK alone until not very long ago. Now we're seeing it across Europe, in Germany, even Italy," Magnus told the Reuters Summit.

Labels: Morgan Stanley

Morgan Stanley offers $15m to make up for missing emails

By OUT-LAW.COM
February 22, 2006

Investment bank Morgan Stanley has offered to pay the Securities and Exchange Commission (SEC) $15m to settle an investigation by the regulator into an alleged failure by the firm to produce email evidence during a legal dispute.

According to an Annual Report filed by Morgan Stanley with the SEC earlier this month, the investment bank has reached "an agreement in principle" with the enforcement division of the SEC, but the settlement has not yet been presented to the full SEC...

...The investigations relate to the 1998 sale of Coleman Co, owned by billionaire Ronald Perelman, to Sunbeam Corp.

Labels: Morgan Stanley

Another Fishy Hedge Fund

October 13, 2005
By Justin Hibbard and Adrienne Carter
Business Week

A mysterious money manager, nonstop hype, plunging returns, empty offices, and now an SEC probe -- the intrigue at Wood River deepens.

Ketchum, Idaho, is the kind of place where people tend to know each other. Close to the Sun Valley ski resort, the tony town of 3,873 boasts several Wall Street refugees who manage money for wealthy neighbors and clients elsewhere. Yet few residents say they know John Whittier, a 39-year-old money manager who moved to the area about five years ago and opened an office for his fledgling hedge-fund firm, Wood River Capital Management, named for the picturesque river that runs through Ketchum.

Locals describe Whittier as an absent-minded-professor type who drives a Lincoln Navigator and sometimes fetches his morning coffee from a Tully's café in his pajamas. Beyond that he keeps to himself, they say. Investors in Wood River's funds apparently didn't know much about Whittier, either. The ex-stock analyst at investment bank Donaldson, Lufkin & Jenrette presented himself as a savvy stock trader overseeing hundreds of millions of dollars for investors. Marketing materials for his flagship fund trumpet 25% returns in the first eight months of this year, a period when the stock market was basically flat.

But some investors got nervous and tried -- unsuccessfully -- to get their money back late last month when Whittier's big bet on an obscure Silicon Valley stock slumped badly, say investors' lawyers. The firm stopped answering its phone. Last week, Wood River's offices in downtown Ketchum were locked and apparently unoccupied. FedEx packages piled up outside next to strollers and a red wagon left by Whittier's two young children.

Wood River is now the subject of a preliminary investigation by the Securities & Exchange Commission -- the latest hedge-fund scandal that is sure to intensify calls for greater government oversight of these lightly regulated investment pools. Only two weeks ago the founders of collapsed Bayou Management, a hedge fund in Stamford, Conn., pled guilty to criminal fraud.

As in the Bayou affair, Wood River presented red flags that careful investors should have noticed. The firms Wood River's promoters named as its outside auditor and bookkeeper, for example, say flatly that they didn't provide those services to the hedge fund. Morgan Stanley (MWD ), listed in April as one of the hedge fund's two prime brokers, in fact was not, according to a person familiar with the matter...

Labels: Bayou Group, John Whittier, Morgan Stanley, Wood River Capital

A boon for hedge funds

Bloomberg News
September 6, 2005

Lured by rising markets in Germany and expectations of economic reform after national elections this month, hedge funds now own almost a quarter of German company shares, according to research from Lehman Brothers. "My sense is that it's somewhere between 20 and 25 percent," said Christian Meissner, co-leader of investment banking at Lehman Brothers in Germany. He said that in the last year the figure had probably gained "around 5 percentage points."

Determining the share of the German market that is owned by hedge funds is difficult because much of the data are not published in Europe, Meissner said. Lehman based its estimate on examinations of trading flows and discussions with companies.

German companies are increasingly feeling the influence of shareholders like hedge funds. Werner Seifert was removed as chief executive of Deutsche Börse in May in part because of a campaign by hedge funds against his plan to buy the London Stock Exchange. And Fresenius Medical Care, a provider of dialysis products, last month amended a plan to convert preferred shares into common stock after Citadel Equity Fund and Och-Ziff Capital Management lobbied for the change.

But the growing involvement of hedge funds has provoked controversy in Germany, where some politicians have called short-term investors "locusts." "Hedge funds owning equities and engaging in shareholder activism is a good thing because they are driven by shareholder profit maximization," said Narayan Naik, director of the Center for Hedge Fund Research and Education at London Business School.

Jack Inglis, deputy head of European prime brokerage at Morgan Stanley in London, said rising markets had attracted hedge funds to Germany. "Hedge funds are committing more capital to equity markets in general as markets become more favorable," he said. "And Germany has been particularly favorable."

Labels: Morgan Stanley

Merrill Lynch Settles on SEC Claim

By Hunter Douglas
Bloomberg News
August 16, 2005

Merrill Lynch & Co., the world's third-largest securities firm, agreed to pay $10 million to settle claims it failed to deliver prospectuses to investors, the New York Stock Exchange wrote in a statement yesterday. The fine, which Merrill disclosed in March, is the second-largest levied by the exchange. In December, Morgan Stanley paid $13 million to settle accusations that it also failed to deliver prospectuses, which are documents that explain the terms and goals of investments such as securities and mutual funds.

From October 2002 to March 2004, Merrill failed to deliver prospectuses in 64,000 transactions involving registered, open-ended mutual-fund securities, the exchange said. New York-based Merrill also failed to deliver documents for about 275 accounts involving auction-rate preferred stocks, retain certain e-mails and update employee information, the exchange said.

"The delivery of a prospectus to a potential investor is the foundation of investor protection," Richard Ketchum, chief regulatory officer for the exchange, wrote. "More than just a sales document, the prospectus talks about risks." Merrill didn't admit or deny the allegations, spokesman Mark Herr said. He said "coding problems" caused some investors not to receive prospectuses.

Labels: Morgan Stanley

Morgan Stanley in $6.1M NASD settlement: Regulator says company did not adequately supervise its fee-based brokerage business.

August 2, 2005
Reuters

WASHINGTON - Brokerages regulator NASD said Tuesday that it fined Wall Street investment bank Morgan Stanley $1.5 million for failing to adequately supervise its fee-based brokerage business.

Morgan Stanley also was ordered to pay $4.6 million in restitution to more than 3,500 customers, NASD said. The case involved fee-based accounts, an alternative to traditional commission-based brokerage accounts, NASD said...

Labels: Morgan Stanley