Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Pawan Passi (Passi), previously associated with Morgan Stanley & CO. LLC, has at least one disclosable event. These events include one regulatory event, alleging that Passi recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on January 12, 2024.
The Securities and Exchange Commission (‘Commission’) deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant Sections 15(b) and 21C of the Securities Exchange Act of 1934 (‘Exchange Act’) against Pawan Kumar Passi (‘Passi’ or ‘Respondent’). The Commission finds that this matter involves fraudulent conduct perpetrated by Pawan Passi, formerly the head of Morgan Stanley & Co. LLC’s (‘Morgan Stanley’) Equity Syndicate Desk in the Americas (‘Syndicate Desk’), involving large blocks of stock that the investment banking firm purchased from investors in such securities (the ‘selling shareholders’). From at least June 2018 through August 2021 (the ‘Relevant Period’), Passi disclosed to certain buy-side investors non-public, potentially market-moving information, concerning impending ‘block trades’ that the firm had been invited to bid on or was in the process of negotiating with the selling shareholders. Those buy-side investors used such information to ‘pre-position’-or take a short position in-the stock that was the subject of the upcoming block trade. Such disclosures by Passi violated the selling shareholders’ expectations of-and, in certain instances, express requests for-confidentiality conveyed to the Syndicate Desk, representations of confidentiality made by the Syndicate Desk, and/or Morgan Stanley’s policies regarding the treatment of confidential information. As a result of his conduct, Passi willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.