SEBI resolves Morgan Stanley case after receiving settlement amount

SEBI resolves Morgan Stanley case after receiving settlement amount

The market regulator was paid Rs. 25,35,000

The Securities and Exchange Board of India (SEBI) has liquidated the Morgan Stanley France SA case of an alleged violation of securities norms after the payment of a settlement amount.

In 2017, certain trades in long-dated Nifty options between Reliance Strategic Investments Ltd and Morgan Stanley took place. SEBI conducted investigations into the trades in July-August the same year.

SEBI had alleged violations of certain Prohibition of Fraudulent and Unfair Trade Practices Regulations by both entities.

In December 2021 show cause notice, SEBI alleged that the act of trading 11,400 put options at a fair price on the basis of mutual arrangement amounted to active concealment of understanding by Reliance and Morgan Stanley.

Pending adjudication proceedings, in February 2022, Morgan Stanley filed a settlement application.

Thereafter, SEBI’s high-powered advisory committee recommended the case be settled upon payment of Rs.25,35,000. It suggested the amount be recovered from the ‘officer in default’ to avoid penalizing the investors.

The whole-time members of SEBI approved the recommendation and, as per the order, early this month, Morgan Stanley remitted the settlement amount.

Accepting the additional settlement term, Morgan Stanley informed SEBI that it "undertakes to file a compliance letter confirming recovery of settlement amount from such officer, in due course following the issuance of the settlement order by SEBI."