At least four traders at New York-based Morgan Stanley have been fired or placed on leave after reportedly concealing a loss of between $100 million and $140 million, a new report from Bloomberg News said.
The traders in question allegedly mismarked, or purposely mis-priced, some emerging market currency trades, according to Bloomberg, which cited people with knowledge of the matter. At least some of the traders, who are based in New York and London, would be leaving the firm, the report said.
Revenue from trading remains important for the bank, even as CEO James Gorman shifts the bank’s focus from its trading and advisory businesses to its wealth management services.
The bank’s third quarter earnings results, reported in October, showed revenue of $10.1 billion, which was roughly $500 million above what analysts had been expecting. Revenue from the company’s bond-trading desks rose 21% year-over-year to reach $1.43 billion. This was $320 million more than the Street had been expecting. Stock-trading revenue came in at $1.99 billion, which was just under the Street’s estimate of $2.1 billion.
A representative from Morgan Stanley declined to comment.