(Bloomberg) -- Scott Eisner, a trader who was terminated by Morgan Stanley after multi-million-dollar losses in a portfolio he handled, was cleared of wrongdoing in connection with alleged mismarking of securities, his lawyers said.
Morgan Stanley’s foreign-exchange options business was hit by losses last year on trades tied to the Turkish lira, a portfolio run day-to-day by London-based Eisner. The securities firm subsequently started a probe to examine whether some traders improperly d transactions and concealed losses linked to those trades, leading to the suspension or ouster of some of them, Bloomberg has previously reported.
Eisner wasn’t “material” to Morgan Stanley’s investigation into mismarking of currency options, according to a letter to Bloomberg from law firm Schillings International LLP, which represents Eisner. The law firm declined to disclose why Morgan Stanley terminated the trader’s employment last year, but said the bank’s “material concerns” relating to the mismarking probe at the unit didn’t involve Eisner.
Morgan Stanley declined to comment.
Morgan Stanley’s FX options desk wagered and lost money on the Turkish lira after mounting political tensions in the country whipsawed investors in 2018 and the early part of 2019. Morgan Stanley lost about $100 million in the third quarter of last year on FX options linked to currencies in Central and Eastern Europe, the Middle East and Africa, and then dropped another $70 million in the final period, Bloomberg has reported.
Morgan Stanley has since overhauled its leadership ranks at the currencies business.
The New York-based bank last month named Samer Oweida, global head of FX sales, and Craig Abruzzo, who leads futures and derivatives clearing in the equities business, to head the currency-trading division. Both will report to Jakob Horder, head of the macro division that houses FX trading, the firm has said.
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