The Securities and Futures Authority has issued details of two Morgan Stanley brokers fined for fail...
The Securities and Futures Authority has issued details of two Morgan Stanley brokers fined for failing to act with due skill, care and diligence.
Hugh Rance and Bradley Bilgore breached principle two of the regulator's statement of principles and have been ordered to pay fines of £25,000 and £15,000 respectively in addition to costs of £19,008 and £11,404 respectively.
The actions against Rance and Bilgore arose after the execution of a client's order to purchase shares in a pharmaceutical company, despite says the SFA 'the apparent impropriety of the client's instructions'. The pair accepted the SFA's conclusion that they failed to question the client's instructions or raise the matter internally by consulting management.
On 2 September 1998 Rance, then head of the UK equities sales trading and Bilgore, head of UK equity trading, received an email from a US investment adviser instructing them to discretely purchase more than 1.5m shares in a pharmaceutical company. Although no time was set for the execution of the order Rance and Bilgore followed the instructions immediately.
Later that afternoon, the client contacted Rance for an update and told him, on finding out only 160,000 had been bought, to start purchasing aggressively especially towards the close of trade and endeavour to ensure the stock's price closed higher. The client cautioned buying should be 'within the limits of not raising eyes…at the regulatory authorities'.
These instructions were passed from Rance to Bilgore and onto MS's New York office. Rance continued to inform the client throughout the rest of the day and completed the order by the close of trade that day.
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