France’s markets watchdog the Autorité des Marchés Financiers (AMF) has fined Morgan Stanley €20 million for manipulating sovereign bond prices.
According to the AMF, the firm’s London desk manipulated the prices of 14 French government bonds and eight Belgian bonds back in June 2015.
Morgan Stanley also manipulated the price of futures contracts on French debt, the AMF said in a statement on Tuesday.
The team “aggressively” purchased a significant number of French sovereign bonds futures contracts and German sovereign bonds futures on the German derivatives regulated market Eurex, the regulator said.
These were then sold on at an “abnormal and artificial” price, the AMF’s enforcement committee found. The purpose of the acquisition of the French sovereign bonds futures contracts was to influence a price increase of this financial instrument in order to cause an increase in the price of the French and Belgian bonds, it said.
The decision to impose the fine was made on December 4, but made public on December 10. Morgan Stanley intends to challenge the penalty, it has been reported.
“The activities in question were undertaken in accordance with market practice and as part of the firm’s role and obligations as a market maker and Morgan Stanley remains confident that it has acted in the best interests of the market and its clients,” it said in a statement.
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