Banking Law News

Morgan Stanley Soared in Currency Derivatives Before Lira Mess

Dec. 6, 2019, 5:00 AM

Morgan Stanley’s drive into a lucrative niche in the foreign-exchange market has hit a major road block.

The firm has more than doubled its activity since 2016 to overtake rivals such as Goldman Sachs Group Inc. in the bazaar for currency-linked derivatives known as FX options. Now, Morgan Stanley is probing whether traders improperly valued the esoteric securities, concealing as much as $140 million in losses, Bloomberg reported last week, citing people familiar with the matter.

The world’s biggest stock brokerage adopted a “go big or go home strategy” in the business, said Mark Williams, a finance lecturer...

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