Morgan Stanley yesterday became the latest financial services group to fall victim to a rogue trader as it admitted that it had suspended a credit trader in London for trying to hide losses of about $120m (£61.3m), The Times reports.
America’s second-biggest securities firm said that the Financial Services Authority was conducting a full investigation into the conduct of an unnamed employee - understood to be London-based Matt Piper - after Morgan Stanley discovered in May what it called a “$120m negative adjustment to marks previously taken in a trader’s book that did not comply with the firm’s policies”.
The markdown is thought to relate to short-term trading in credit index options that may date back as far as last year.
BRITAIN'S BOSSES HAVE been warned that they will become targets of future probes by the Financial Services Authority as the watchdog seeks to crack down on market abuse, according to The Telegraph.
The FSA's director of enforcement, Margaret Cole, said the regulator would switch its focus from companies to individuals as it believed it would be a more effective deterrent against wrongdoing.
“You can expect to see more supervision and enforcement focus on individuals, especially significant influence function holders,” she said.
“We have made a strategic decision to investigate more individuals, so even though that could well mean that cases take longer, and quick public outcomes are delayed, we consider this a price worth paying to obtain credible deterrence.”
THE FINANCIAL SERVICES Authority (FSA) said that it could veto American efforts to impose regulation on the London oil market, as the City took centre stage in an escalating row over the role of speculators in driving up the global price of crude oil, The Times also reports.
Stuart Fraser, the City of London's policy chief, described the call as “American imperialism” and rebutted attacks on the FSA in the US Congress as “unhelpful”.
In an announcement on Tuesday, America's Commodity Futures Trading Commission (CFTC) sought to extend disclosure requirements to oil futures trading on the ICE Europe exchange in the City.IFAonline
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