December 22, 2015

Morgan Stanley Investment Management will pay $8.8 million to settle charges that one of its portfolio managers, Sheila Huang, unlawfully conducted prearranged trading known as “parking” that favored certain advisory client accounts over others.  An SEC investigation found that Huang arranged sales of mortgage-backed securities to brokerage firm SG Americas at predetermined prices that would enable her to buy back the positions at a small markup into other accounts advised by Morgan Stanley.  Huang also sold additional bonds at above-market prices to avoid incurring losses in certain accounts, but repurchased them at unfavorable prices in a fund that she managed without disclosing it to the disadvantaged fund client.  SG Americas also agreed to pay more than $1 million to settle SEC charges related to its role in these transactions.  SEC

Tagged in: Market Manipulation and Trading Violations, Regulatory Violations, Securities Fraud,