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Goldman Sachs flagged Morgan Stanley block trades to Hong Kong regulator

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© Reuters. FILE PHOTO : A photograph of Goldman Sachs’ company logo on the New York Stock Exchange (NYSE), New York City, U.S.A, July 13, 2021. REUTERS/Brendan McDermid/File Photo

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(Reuters) – Wall Street bank Goldman Sachs, (NYSE:), reported rival Morgan Stanley (NYSE:) Hong Kong’s financial regulator was notified Thursday about a number of block trades or large shares sales, according to the Financial Times.

According to the report, Goldman alerted territory’s Securities and Futures Commission 3 years ago to discuss price drops in stocks of small Hong Kong-listed businesses that took place shortly before Morgan Stanley introduced blocks of shares on the market. (https://on.ft.com/3jYyHWs)

According to the Financial Times, it was unknown if Hong Kong authorities had investigated claims made by Goldman employees.

Morgan Stanley and Goldman Sachs didn’t immediately reply to Reuters inquiries for comment. However, the Hong Kong regulator did not comment.

The U.S. Securities and Exchange Commission investigated whether financial officers may have breached rules by tipping of hedge funds prior to block trades. Reuters reported this in February, citing a source who was familiar with the matter.

The FT reports that Hong Kong’s financial regulator started questioning banks regarding their block trading practices after the U.S. investigation was made public.

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