Morgan Stanley criticized in Hong Kong insider trading case

27 July 2009

Morgan Stanley's internal compliance systems in Hong Kong have been described as "hopelessly inadequate" by prosecutors in an insider trading case.

According to the country's Securities and Futures Commission, the bank's operations were "run in a haphazard and inefficient manner", the Financial Times reports.

"People did not adhere to the procedures that were designed to check on employee trading," prosecuting counsel Charlotte Draycott said.

Former managing director at Morgan Stanley Du Jun is currently facing ten insider trading charges after he allegedly used privileged information to purchase shares in Citic Resources.

He has denied the charges, with his barrister Alexander King telling the new source that Mr Du did not trick or mislead the bank's compliance division, which signed off the share purchases.

Last week, chairman of Telefonica Cesar Alierta was cleared of insider trading charges in Madrid under country's statute of limitations laws.

He had been accused of committing the offence while running tobacco firm Tabacalera.

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