Morgan Stanley (MS) Smith Barney, the brokerage venture of
Morgan Stanley and Citigroup Inc. (C), was fined $450,000 after a trader
amassed a $1.3 billion bet in 2009, Financial Industry Regulatory Authority
records show.
The brokerage didn’t have enough controls in place to detect
that Jared Weinryt, 31, had breached his $116 million trading limit as he made
overnight bets on futures, Finra said this month. The trades led to losses for
Morgan Stanley Smith Barney of about $14.9 million.
The brokerage employed Weinryt from 2006 to 2009, Finra
records show. He bought and sold futures, agreements to trade assets at set
prices and dates. Investors sometimes buy futures as a bet on price
fluctuations and sell them before the delivery date. Weinryt traded in futures
tied to U.S. sovereign debt and Eurodollars.
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