Morgan Stanley, UBS fined on oil trade
Morgan Stanley is fined $14 million, and UBS is hit with a $200,000 penalty. Moore Capital is fined $25 million over platinum and palladium manipulation.
U.S. futures regulators fined Morgan Stanley (MS) $14 million for failing to report a big block oil trade and fined privately held Moore Capital $25 million for attempting to manipulate palladium and platinum futures.
The CFTC also ordered UBS Securities (UBS) to pay a $200,000 penalty tied to the Morgan Stanley settlement.
The firms neither admitted nor denied the charges, the CFTC said.
Morgan Stanley was down 1.8% to $30.72 this afternoon; UBS was off 0.7% to $15.65.
The CFTC said a Morgan Stanley trader arranged a block crude oil trade with a UBS broker for Feb. 6, 2009, but the two agreed to delay reporting the trade until after the market closed.
NYMEX rules require block trades to be reported within five minutes of execution.
The CFTC also ordered Morgan Stanley to step up its training for traders and enhance its surveillance of trade-at-settlement block trades on the NYMEX for three years.
Morgan Stanley said it cooperated with the CFTC investigation. "As the CFTC indicates, this matter concerned an isolated request by a former Morgan Stanley trader," the company said.
UBS declined comment. The CFTC said UBS reported the incident and the potential violation after the company learned about the trade from its broker.
Separately, the CFTC fined Moore Capital Management -- one of the largest and most consistently profitable hedge funds -- for trying to manipulate the settlement prices of platinum and palladium futures contracts on the New York Mercantile Exchange.
The CFTC said Moore's fund portfolio manager tried to manipulate platinum and palladium futures from at least November 2007 through May 2008 by entering trades in the last 10 seconds of trading in a manner designed to exert upward pressure on the settlement prices.
The practice is known as "banging the close."
In addition to the fine, Moore Capital has restrictions on its trading activities for three years, including a two-year restriction on its trades within 15 minutes of and during the close in the platinum and palladium futures and options markets, the CFTC said.
Moore Capital said the individual involved in the settlement case left the company in the fall of 2008.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market began the new week on a cautious note. The S&P 500 lost 0.3%, but managed to erase more than half of its opening decline. Thanks to the rebound, the benchmark index reclaimed its 50-day moving average (1976.78) after slipping below that level in the morning.
Equities slumped at the open amid a couple global developments that dampened the overall risk appetite. Continued student protests in Hong Kong and a potential response from China weighed on the ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'