Morgan Stanley Is Fined for First Republic C.E.O.’s Stock Sales

Published On Sep 6, 2024, 4:26 PM

James Herbert, former CEO of First Republic Bank, sold nearly $7 million worth of shares just before the bank collapsed last year. Massachusetts regulators have fined Morgan Stanley $2 million for clearing his trades without proper scrutiny regarding possible insider trading. These sales, made in the lead-up to First Republic's failure, helped Herbert avoid losing all his investment. The situation poses serious questions about corporate governance and regulatory compliance within Morgan Stanley, which has not admitted or denied wrongdoing but agreed to the fine.

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Given the fallout from this incident, Morgan Stanley may face increased regulatory scrutiny and potential reputational damage which could impact its stock price. Investors may view this negatively, particularly if it leads to further regulatory actions or more financial penalties.

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Morgan Stanley Is Fined for First Republic C.E.O.’s Stock Sales

Sep 6, 2024, 4:26 PM

James Herbert was permitted to sell nearly $7 million of shares before First Republic Bank’s demise last year, Massachusetts regulators said.

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