Administration July 4, 2004

Morgan Stanley Gets Swept Into Market Timing Investigation

April 7, 2004 (PLANSPONSOR.com)—The Securities and Exchange Commission (SEC) is investigating trades made at a Baltimore office of Morgan Stanley that recently fired two employees in relation to market timing activities, the Wall Street Journal reported.
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The branch manager, Harry Buzzered, and a broker, Chris Glassman, were dismissed in March for activities related to Glassman’s clients’ market-timing activities, according to the Wall Street Journal.   However, the paper also reported that a Morgan Stanley spokeswoman did not comment on the SEC investigation nor on why the men were fired, only that they are no longer employed at Morgan Stanley.

This investigation comes during the continuing investigation into the mutual fund industry.    In February, Morgan Stanley received subpoenas from the Office of the State Auditor and the Attorney General of West Virginia requesting information about the firm’s mutual fund trading practices (see  WV Subpoenas Morgan Stanley Over Fund Trades ).   Last fall, Morgan settled charges of improper sales and of failing to tell clients its brokers were paid more to sell certain mutual funds brought by regulators without admitting or denying wrongdoing.

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