SEC has reportedly issued subpoenas; Justice Department also reportedly investigating
Block Trading Investigation Widens According to Reuters, Regulators probe block trading at Wall Street banks and hedge funds.
The Wall Street Journal reported the individual banks that were under the government’s microscope: Regulators Probe Block Trading at Morgan Stanley, Goldman, Other Wall Street Firms.
Did bankers tip off large hedge funds about huge share sales? That is the question that is circulating around Wall Street today.
Continued alleged misconduct despite “lessons learned” mandates from DoJ’s June 2020 Evaluation of Corporate Compliance Programs (Section A – Risk Assessments)?
Expect new DoJ, regulatory enforcement actions and monitors despite firms’ promises of LIBOR, MBS, FX “lessons learned”.
Now it’s block trading tips to favored hedge funds ahead of client orders / trades.
Furthermore, how will US Deputy Attorney General Monica’s speech regarding recidivist behavior apply? Greater fines? Monitors? Jail if clients suffered?
In conclusion, the issuance of subpoenas does not necessarily mean charges will be brought against any of the firms, or individuals whose activities are being scrutinized. Regulators have been looking into irregularities around block trades since at least 2019, when the SEC requested records from several large banks,
