Tags: morgan | stanley | loss | traders | forex

Morgan Stanley Ousts FX Traders Amid Multi-Million Dollar Loss

Morgan Stanley Ousts FX Traders Amid Multi-Million Dollar Loss
(Alexey Novikov/Dreamstime)

Thursday, 28 November 2019 12:07 PM

Morgan Stanley has fired or placed on leave at least four traders amid a probe into alleged mismarking of trades linked to emerging-market currencies, according to people with knowledge of the matter.

The traders are based in London and New York, the people said, declining to be identified as the details are private. Morgan Stanley is investigating whether the suspected mismarking helped conceal a loss of $100 million to $140 million, according to the people. A Morgan Stanley spokesman declined to comment.

In so-called mismarking, the value placed on securities doesn’t reflect their actual worth. The probe at Morgan Stanley involves complex trading products including so-called FX options that give buyers the right to trade currencies at a set price in the future, enabling them to both speculate and hedge against potential losses.

Morgan Stanley’s currency options desk has struggled this year amid a slump in volatility, the swings in currencies that can generate profits for traders, even across more unruly emerging markets such as Turkey, according to a person with knowledge of their reported performance.

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The bank has targeted at least four traders based in London and New York.
morgan, stanley, loss, traders, forex
176
2019-07-28
Thursday, 28 November 2019 12:07 PM
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