Morgan Stanley shares drop on reported probe

Considering the lack of details and the fact these two deals do not appear to have printed... I'm inclined to believe Morgan Stanley(for now)

http://www.ft.com/cms/s/0/069693e0-5dec-11df-8153-00144feab49a.html

Morgan Stanley’s chief executive said on Wednesday that the Wall Street bank had “no knowledge whatsoever” of a US government probe into it, as its shares fell following a report that federal prosecutors were looking at mortgage-related deals.

James Gorman said the US Department of Justice had not asked the bank about two collateralised debt obligations – securities backed by mortgages – mentioned in an article in Wednesday’s Wall Street Journal.

james gorman

James Gorman: 'We have no knowledge whatsoever about the Justice Department investigation'

“We have not been contacted by the Justice Department about any transactions that were raised in The Wall Street Journal article,” Mr Gorman said at a press conference in Tokyo. “We have no knowledge whatsoever about the Justice Department investigation.”

But the bank’s shares had fallen by more than 2 per cent to $27.79 by early afternoon.

The DoJ declined to comment.

A probe into Morgan Stanley’s CDO activities prior to the financial crisis would deepen the market’s fears of a Wall Street-wide investigation into the market for mortgage-backed securities.

Last month, the Securities and Exchange Commission filed civil fraud charges against Goldman Sachs, accusing it of misleading investors in a CDO. Federal prosecutors are believed to be looking at Goldman, which denies the SEC charges.

“If they are going after Morgan Stanley, they are going after everyone,” says one senior executive at a competing firm.

Morgan Stanley is under investigation. NO surpirse Riversider went with the CEO of MS being that he is a corporate prostitute:

http://www.marketwatch.com/story/the-government-may-be-undermining-its-goldman-case-2010-05-12

Yes, my posts about Goldman make that a forgone conclusion LMAO!

You were the one who said that laws should be re-written to make them more in favor of the BANKS. That, my friend, makes you a corporate whore (and an honorary member of the U.S. Chamber of Commerce).

Sorry, Alpo I'm in favor of transparency, having banks/brokers act as a fiduciary, prohibiting banks that get tax-payer funds, FDIC guarantees or Fed's discount window from engaging in proprietary trading, etc etc.