Another ‘rogue trader’ in the city
Morgan Stanley suspends rogue trader
LONDON – Morgan Stanley has suspended a suspected rogue trader who reportedly cost the bank $120 million (£60 million) by overpricing investments. Matthew Piper, a middle-ranking credit trader working at the bank’s London offices was suspended a month ago and the incident has been reported to the UK Financial Services Authority (FSA).
The news comes after rival US bank Merrill Lynch has launched a separate investigation, probing the activities of one of its London-based equity derivatives traders on suspicion of inflating mark prices on single-stock derivatives. Merrill Lynch said its risk management system caught the suspicious trades, said to have taken place in April.
Morgan Stanley, however, said it had discovered the suspicious investments in the second half of May but believes they had gone undetected for at least three months. It has disclosed a $120 million ‘negative adjustment’ related to overstated valuations on some of the trader’s positions.
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