dChan - Q Origins Project Archive

More Senior Bankers Implicated In Leaks About Federal "Block Trading" Probe

Following reports earlier this week that several big-name short sellers had their offices raided by federal agents as part of an SEC/DoJ investigation into "spoofing,""scalping" and illegal short-selling, more senior bankers are being outed as targets in the other ongoing SEC/DoJ probe targeting big name banks and hedge funds: that is, the investigation into "block trading" which - as it turns out - does involve the market-moving block trades that resulted from the Archegos collapse.

A team of Bloomberg reporters revealed on Friday that in addition to Morgan Stanley executive Pawan Passi, a number of other senior bankers who were found to be among Passi's "frequent contacts" are also having their communications examined with a fine-toothed comb by a team of federal investigators. They include the following:

The list of people whose communications are being sought ranges from executives at prominent Wall Street hedge funds, such as Andrew Liebeskind at Citadel’s Surveyor Capital and Jon Dorfman at Element Capital Management, to money managers at smaller firms focusing on block trades, including executives at CaaS Capital Management and Islet Management, and a former employee at Segantii Capital Management, the people said.

Bankers include Felipe Portillo, a risk executive within Credit Suisse Group AG’s equity capital markets group, Michael Daum, a partner at Goldman Sachs Group Inc., and Michael Lewis, the head of U.S. equities cash trading at Barclays Plc, the people said. Lewis worked at Morgan Stanley until 2018.

According to BBG, being named here doesn't mean these people are "central" to the investigation - just that their names have "come up". Investigators are focusing on finding evidence of any particularly "well-timed" block trades

The inquiries from investigators show they’re interested, in part, in whether any money managers placed well-timed bets before block trades that have the power to drive down prices, according to the people. Even then, it’s unclear who, if anyone, might be suspected of leaking any material non-public information or acting on it.

Inside Morgan Stanley, Passi - who has apparently been on leave since late last year - is described by colleagues as "well-liked" and "low key". Several of Passi's colleagues at MS have also been ensnared in the probe. Their names are:

Authorities have been going over recordings of his phone calls, Bloomberg reported earlier this week. They’re also scrutinizing communications involving at least three of his colleagues at Morgan Stanley: Evan Damast, its global head of equity and fixed-income syndicate, John Paci, a senior equities trading executive, and Charles Leisure on the syndicate desk. They and Passi haven’t responded to messages seeking comment.

https://www.zerohedge.com/markets/more-senior-bankers-implicated-leaks-about-federal-block-trading-probe