FirstFT: Morgan Stanley orders lawyer to oversee block trading desk

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Hello. Morgan Stanley has ordered an in-house attorney to monitor the unit involved in a federal block trading probe, underscoring the seriousness of the probe and the lender’s efforts to step up oversight.

The Wall Street bank has onboarded one of its attorneys to sit on its U.S. Stock Syndicate office to oversee bankers and answer legal questions, according to people briefed on the arrangement.

The decision was made after Morgan Stanley put Pawan Passi, head of the U.S. equity syndicate office, on furlough last year, the sources added. Last week they furloughed a second stock union board member, Charles Leisure, according to people familiar with the matter. Neither Passi nor Leisure have been charged with wrongdoing. The bank has not confirmed that either employee is on leave.

Investigations by the Justice Department and the Securities and Exchange Commission into Morgan Stanley’s block trading activities gained momentum after the collapse last year of Bill Hwang’s Archegos Capital Management.

Block trades are wholesale stock sales executed by an investment bank, normally for a client, that tend to be large enough to move the markets. US authorities are investigating whether investors were given advance notice of the transactions, which have become a major legal risk for Wall Street banks.

Go Further With Alphaville: Here’s Why Block Trading Matters

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The day ahead

US consumer confidence: The Conference Board is expected to report that consumer confidence rose to 97.9 in August, according to analysts polled by Refinitiv.

Companies: Best Buy is expected to see lower revenue in the second quarter, compared to a year ago, due to high inflation concerns. Information technology maker Hewlett Packard Enterprise, cybersecurity group CrowdStrike, pet supplies retailer Chewy and luxury clothing retailer PVH all reported earnings after the bell.

US real estate market: The pace of house price increases is expected to ease in June, adding to concerns about a potential slowdown in the housing market.

Jobs in the United States: Data from the US Bureau of Labor Statistics is expected to show job openings fell slightly to around 10.5 million in July from 10.7 million the previous month. This data will also show the number of employees who resigned from their jobs in July.

Unemployment in Mexico: Mexico’s unemployment rate is expected to have risen to 3.5% in July from 3.3% in June.

EU Security EU foreign ministers are meeting in Prague to discuss a bloc-wide ban on tourist visas for Russians entering the Schengen area, a proposal backed by Finland, Poland, the Czech Republic and the Baltic countries.

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Bar chart of trends in heart attack deaths by age group (2021 vs. 2019) showing an increase in heart attacks in almost all age groups

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Passport delays hamper Brits on the go Thousands of British citizens renewing their passports this year, particularly those living overseas, have endured chaos in processing their papers which, along with flight disruptions and train strikes, has created a collapse of basic services.

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