Compliance February 7, 2007

A Billion Here, A Billion There…

The New York Stock Exchange has fined Morgan Stanley $300,000 for its failure to stop a trader from entering an order to buy $10.8 billion in stocks – rather than the $10.8 million intended.
Reported by
The NYSE said Morgan Stanley did not have appropriate blocks within its trading systems to prevent an erroneous order from being routed to the NYSE floor and failed to properly supervise and train traders.
In all, 692 NYSE-listed stocks, some 12.7 million shares, were traded on the NYSE Floor. For at least 15 minutes, the error caused significant market disruption until the accuracy of the orders could be verified, according to Reuters.
Hedged Exposure
The NYSE’s February report on disciplinary actions, a customer contacted Morgan Stanley on September 1, 2004, to unwind part of a swap, according to the report. A Morgan Stanley affiliate was the counterparty to the swap, and had hedged its exposure by maintaining a short position in shares underlying the trade. As a portion of the swap was unwound, a Morgan Stanley trader tried to buy a basket of stocks to cover some of the firm’s short position.
About 9:32 a.m. the trader entered an order on behalf of the firm to buy 100,000 units of the basket to cover a portion of the short position – but, according to the NYSE, the system used to create the basket built in a multiplier of 1,000, so the trader erroneously created a basket with a value of $10.8 billion instead of $10.8 million. As a result, the NYSE said erroneous orders for about 677.4 million shares were transmitted, and about 81.5 million shares worth some $875.3 million were traded before the firm canceled the order.
Morgan Stanley consented to the fine and censure without admitting or denying guilt. The NYSE hearing officer, according to the report, noted that Morgan Stanley has since established preset trade limitations for each trader on its swap desk and has added safeguards.
Data & Research February 7, 2007

A Valentine’s Day Primer

Regardless of your relationship status, Valentine’s Day is coming – and for those of you in some kind of committed relationship (or wanting to be), here are some handy insights to get you ready for the day:
Reported by
What We Want
“Men can breathe a sigh of relief because according to our survey, women don’t have grandiose Valentine’s Day expectations,” explains Lisa Benenson, editor-in-chief of Hallmark Magazine. “When asked their idea of the perfect Valentine’s Day gift, an overwhelming majority of women said, ‘anything as long as it’s his idea.’
As for that idea – well, a romantic weekend get-away was the second most popular choice for women as a Valentine’s Day gift (cited by 24%), but it was the most popular by men (23%) – besting even the receipt of a flat screen TV (16%).
What We Get
According to Hallmark, what women say they usually receive for Valentine’s Day includes:
  • 30% – A card (hey, consider the sponsor of the survey)
  • 23% – A bouquet
  • 15% – Chocolate
  • 10% – A piece of jewelry
  • 9% – Nothing
  • 5% – Weekend getaway for two (apparently wanting and getting are different things)
As for men, well, their list looks like this.
  • 42% – A card
  • 21% – Gets taken out on a date
  • 9% – Gift card to their favorite store
  • 8% – CD or DVD
  • 8% – Chocolates
  • 7% – Nothing, Zip, Zero
What to Watch
Meanwhile, if you opt for that flat screen TV instead, Blockbuster has some tips for helping pick out romantic movies that both of you will (can?) enjoy, based on films that rated high among both men and women:
  • “Braveheart”
  • “Ghost”
  • “Pretty Woman”
  • “Sleepless in Seattle”
  • “Titanic”
  • “When Harry Met Sally”
What to Watch Out For
It may be cold outside (really cold outside in some places), but things appear to be heating up at work, according to the just-released 2007 Office Romance Survey by career publisher Vault Inc. Nineteen percent of some 575 workers surveyed have dated their boss, while 15% of bosses say they have dated a subordinate – and one-in-five say they met their spouse or significant other on the job.
Nearly one-in-five (17%) of employees confess to being caught trysting at work, up from just 2% last year.
As for where this activity is occurring, offices, conference rooms, the boss’ office, the restroom, a walk-in cooler, the break room – and even in the car driving to visit a customer.

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