Pawan Passi

In January 2024, Morgan Stanley & Co. LLC (“MORGAN STANLEY”) entered into a non-prosecution agreement (the “NPA”) with the U.S. Attorney’s Office and agreed to pay more than $153 million to the United States for making false statements in connection with the sale of certain “block trades” (the “Relevant Blocks”) from 2018 through August 2021. The NPA requires MORGAN STANLEY to forfeit $72,515,141 to the United States, representing its profits from the Relevant Blocks; to pay $64,016,082 in restitution, representing the harm it caused to the sellers of the Relevant Blocks; and to pay a $16,900,000 fine. The NPA requires MORGAN STANLEY to continue to cooperate with and provide information to the United States for at least three years from the date of the agreement. In the event that MORGAN STANLEY violates the NPA, the U.S. Attorney’s Office may prosecute MORGAN STANLEY. PAWAN PASSI, the MORGAN STANLEY employee that supervised block trades during the relevant time, entered into a deferred prosecution agreement (the “DPA”) with the U.S. Attorney’s Office, pending court approval. In the DPA, PASSI admitted that, from 2018 through August 2021, he promised sellers of certain equity blocks that MORGAN STANLEY would keep information concerning their potential sales confidential, knowing that he would disclose that information to buy-side investors and that those investors would use the information to trade in advance of the block sales. As part of the NPA, MORGAN STANLEY agreed to a statement of facts describing the deceptive conduct and the remedial measures that it took in response to learning of that conduct.