On the heels of disappointing earnings revealed this morning, Morgan Stanley has some more bad and embarrassing news. Matthew Piper, a London trader working at Canary Wharf who's in his late 30's, apparently inflated his marks so that he could show better performance. Morgan Stanley discovered the mismarkings in mid-May during a routine audit that were 'inconsistent' with company policy. The bad marks could have started as early as 2007. After having discovered the lapse, the FSA was promptly notified. Piper has been suspended.
According to the Evening Standard:
Mr Piper worked for Morgan Stanley's Canary Wharf office in East London and was given free rein to take punts on company and government debt
He was also allowed to estimate the profits he had earned from his investments at the end of each trading session.
According to the Financial Times:
A trader at a rival firm said the trader had been involved in short-term trading of credit index options on the CDX index.
The mismarkings could have dated back as far as 2007, another person familiar with the investigation said. They came to light in a special review of Morgan Stanley’s hard-to-value asset classes, which have few observable market prices
'Rogue trader' suspended after losing Morgan Stanley £60m - Evening Standard / This is London
Morgan Stanley in rogue trade probe - Financial Times