Here’s what the government claimed: For years Passi and another employee at the bank’s market-leading equities syndicate desk, who wasn’t charged, told select investors about upcoming sales of large blocks of shares of public companies — information they had promised to keep to themselves. In multiple instances, the investors shorted the stock ahead of the sale. The equities-syndicate desk was contacted in 2018 about a block of 10 million Canada Goose shares. That same day, an investor asked a desk employee whether there was anything he should be focusing on. “How is your store of cold weather jackets,” the employee replied. The investor made a $760,000 profit from shorting the stock, according to prosecutors. In another instance, involving a 2021 sale of millions of shares of Star Bulk Carriers Corp., Passi told the seller that he would keep the prospective sale confidential. He proceeded to share the details of the negotiations of the sale with a hedge fund “on an almost daily basis.” The fund then shorted Star Bulk Carriers on its very first trade in the company’s shares. It would later buy a chunk of the block to cover its short. Passi even suggested to hedge funds how they should trade ahead of upcoming block trades he was running, and many took short positions. He then promised “favored buy-side investors” they would get enough of the allocation of the block trade to cover their shorts. Suspicion of such leaks spread not only on the Street — some perhaps driven by envy of Morgan Stanley’s block-trading success — but also within the bank itself. Investors were too perfectly positioned to make money on the trades, one employee said. “How are they set up for every one of these f—ing things?!” the employee asked Passi in August 2021. The question came after a suspect move in iHeartMedia Inc. shares the day the bank was executing a block trade on behalf of a client. Passi blamed a different bank for leaking information about the deal. The day before, he had sent information about the trade to a hedge fund that was shorting the media company. https://www.bloomberg.com/news/arti...-banker-was-daddy-to-hedge-fund-he-tipped-off Crime pays off on Wall Street....
Nothing abnormal. Such a thing will happen again. So deal with it and trade wisely. Move with the herd and make sure you are just a little behind the lead herd. Those hedge funds might provide trading opportunities. So open your eyes big big and look out for trading opportunities. Let the regulators catch the crime. And we catch the trading opportunities.
When will the Wall Street Mafia be prosecuted for its crimes? Idiots at the White House are too busy blocking small airline mergers to even notice. No surprise since Obama administration determined they were too big to prosecute.
Umm didn't you read that he is being prosecuted. "Small" airline deal between 6th and 7th largest US airline to become 5th largest.
“SEC Charges Morgan Stanley and Former Executive Pawan Passi with Fraud in Block Trading Business” https://www.sec.gov/news/press-release/2024-6