Morgan Stanley is nearing an agreement to pay between $200 million and $300 million to resolve a U.S. investigation into its handling of a major employee stock sale. Bloomberg News reported on Thursday.
The report is expected to be released in the coming days, and the fine will be split between the Justice Department and the Securities and Exchange Commission, people familiar with the matter said.
Reuters could not immediately confirm the amount of the potential fine. The investigation relates to so-called “block transactions” that banks carry out on behalf of their customers.
Representatives from the Manhattan U.S. Attorney's Office, Morgan Stanley and the SEC declined to comment.
Authorities have been in talks with the bank in recent weeks to resolve the criminal investigation, agreeing to suspend prosecution in exchange for a fine, people briefed on the matter told Reuters.
The official added that at least one person has been affected as part of the investigation, but authorities are considering possible minor charges or sanctions.
A settlement would finally eliminate what has been a bulge for Morgan Stanley in recent years.
Former CEO James Gorman assured investors that his successor, Ted Pick, will remain at the bank to deal with the block trading investigation and “solve issues.”
In May, the bank said it was in talks with the SEC and the U.S. Attorney's Office for the Southern District of New York to resolve the investigation.
Broker-dealers frequently buy and sell blocks of stock large enough to move a company's stock price, either on behalf of their customers or as part of a hedging strategy.
Block trades tend to increase during periods of high volatility as institutional investors rebalance their portfolios.
