A former Morgan Stanley senior trader in London was banned and fined by the U.K. Financial Services Authority for a form of front-running, the third time this month the regulator has penalized one of the bank??s former traders.
Nilesh Shroff, an executive director at Morgan Stanley until December 2007, was fined £140,000 for buying shares before executing customer orders, the FSA said today. The practice is typically called front-running.
Morgan Stanley, the sixth-biggest U.S. bank by assets, has also had a former oil trader and an ex-proprietary trader in separate departments in London banned by the FSA since May 13. The New York-based bank received a £1.4m fine in the latter case, which involved a senior trader mis-pricing positions by as much as $120m.
Shroff engaged in front-running on seven separate occasions in 2007, knowing it contravened both the bank??s and the regulator??s rules, the FSA??s report said.
??Shroff has been banned from trading because he repeatedly abused his position of responsibility as a senior trader and the trust placed in him by clients and by his employer,? said FSA Enforcement Director Margaret Cole in the statement.
