US probes recordings of Morgan Stanley’s Passi

US probes recordings of Morgan Stanley’s Passi

Banking















Bloomberg

US authorities conducting a criminal probe into how Morgan Stanley executives handle block trades are examining recordings of phone calls between the bank and outside fund managers, according to people with knowledge of the inquiry.

The recordings involve conversations between Pawan Passi, one of Morgan Stanley’s top equities executives in block trades, and investing clients, the people said, asking not to be identified discussing the confidential investigation. The use of such invasive information-gathering underscores how a civil inquiry opened by the Securities and Exchange Commission in 2018 has escalated, with the Justice Department launching an inquiry too.

Passi, whose role in the probe was reported by Bloomberg, isn’t the only person at Morgan Stanley whose actions are drawing scrutiny. The Justice Department has been seeking communications between clients and Morgan Stanley executives including Evan Damast, the firm’s global head of equity and fixed-income syndicate, John Paci, a senior equities trading executive, and Charles Leisure on the syndicate desk, the people said. Neither they, nor Passi, have been accused of wrongdoing.

Spokespeople for the bank, the Justice Department and SEC had no immediate comment. There was no immediate response