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Morgan Stanley Muscling In On Goldman Turf

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This was an entirely familiar story, with the wrong name attached.

A former Morgan Stanley trader has been fined £140,000 and banned by the City watchdog after he traded ahead of clients to profit from their orders. It was the third punishment linked to the bank in the past month.
Nilesh Shroff engaged in so-called "front running" where a dealer, knowing a client's plans, trades in the same direction before they conduct the client's order in a n attempt to move the price and profit from the difference between the two values.
The Financial Services Authority said on Tuesday that Mr Shroff, a senior trader at the bank, "disadvantaged" clients on seven occasions between June and October 2007 by partially front running their deals.
It was the third such trading-related punishment linked to Morgan Stanley in the past three weeks. Earlier this month, the bank paid a £1.4m fine - the tenth largest ever meted out by the regulator - for weak systems and controls that allowed a credit derivatives trader, Matthew Piper, to cover up his losses for six months. Mr Piper was himself fined £105,000 and banned.

Look, people. If you want to do that sort of thing you need to head over to Goldman. The act of front running in such a place as Morgan Stanley debases a time-honored profession. One is reminded of watching the occasional idiot wearing a tux to Shake Shack, or perhaps a grand wedding reception... at Trump Tower. An astute sense of place and time should govern these things. At the very least you should consider limiting your front running to cherry-picking orders from your high-speed, low-drag, captive-quant hedge fund.
Obviously the practice is quite above Morgan Stanley traders, who seem to have mashed the keyboard sufficiently to get caught with their pants down. Leave that work to the professionals, folks.
FSA fines Morgan Stanley trader [The Financial Times]


Layoffs Watch '12: Goldman Sachs, Morgan Stanley, Citigroup, Barclays?

Supposedly summer cuts are under consideration at all firms. Morgan Stanley is planning to eliminate about 100 trading jobs internationally in the next several weeks — with an unknown number of the cuts coming from New York. At Goldman, executives are likely to let the hatchet fall if the slowdown in trading doesn’t reverse itself, bank officials have said...Goldman is already cutting selectively among its middle-management ranks but could cut even deeper, sources explained. Goldman CFO David Viniar has told people that the firm may have to undergo a “right-sizing” again if the markets’ rocky road doesn’t improve, according to sources. And it’s not just Goldman and Morgan. Industry sources said that a number of other firms, including Citigroup and Barclays Capital, may also look to trim staff. [NYP]