Morgan Stanley has fired or placed on leave multiple traders due to an allegation of mismarking securities. It is being reported that the traders concealed losses up to $140 Mio according to people with knowledge of the matter.
The firm is investigating the suspected mismarking, which was linked to emerging-market currencies, said the people, who asked not to be identified as the details are private.
The identified traders are Scott Eisner and Rodrigo Jolig, both based in London, and two senior New York-based colleagues, Thiago Melzer and Mitchell Nadel. According to Bloomberg, Melzer was given responsibility for foreign exchange and emerging-markets Americas trading in March. Nadel runs macro trading in the Americas. Eisner was managing orders for the Central and Eastern Europe, Middle East and Africa currency book, known as CEEMEA.
Bloomberg reports that Morgan Stanley’s currency option desk has struggled this year due to a slump in the volatility that generates profits for traders. Angela Gallo, a finance lecturer at Cass Business School had this to say “the amount of effort still needed in these large organizations to reduce episodes of misconduct. The frequency of misconduct cases in the U.S. and Europe in recent years speaks very loudly that more fundamental changes are required”
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