Senior Trader Said Among Bank of America Dismissals, Morgan Stanley Sued, UBS Talks

Bank of America’s Matthew Montana, who ran international equities trading from New York, was among more than 30 trading and sales employees dismissed this month, people with direct knowledge of the moves said.

Bloomberg reports that Montana, a managing director, was among staff targeted as the firm sought to reduce compensation costs, said one of the people, who asked not to be identified because the moves weren’t announced.

The bank also eliminated a position held by Matthew Unsworth, head of Australian equities in Sydney, a person with knowledge of that decision said earlier this month. Equities trading, sales and risk personnel in Australia will now report to managers in Hong Kong, the person said.

In the meantime, the news organisation also reports that a group of Singapore investors asked to sue Morgan Stanley on behalf of all entities that lost money in synthetic collateralized debt obligations allegedly rigged to fare poorly.

Investors in Morgan Stanley’s Pinnacle Notes lost $154.7 million reinvested by the bank into CDOs tied to companies such as Fannie Mae, Freddie Mac, Lehman Brothers Holdings Inc. and Washington Mutual Inc., plaintiffs alleged in their lawsuit. Morgan Stanley meanwhile set up a swap that allowed it to profit when the CDOs failed, according to the suit.

Finally, The Wall Street Journal reports that UBS is in settlement talks with U.S. securities regulators stemming from an investigation into a mortgage-bond deal that soured during the financial crisis, people familiar with the matter said.

The Securities and Exchange Commission's probe focuses on allegations that UBS defrauded investors in the sale of more than $748m in notes tied to a collateralized-debt obligation the bank created in 2007.

As part of the inquiry, the regulator is also looking at the role allegedly played by a former employee of the firm that managed the assets in the deal.

BofA’s Montana Said to Be Among 30 Cuts in Sales, Trading

Morgan Stanley Faces Class-Action Bid in Pinnacle Suit

UBS in Talks Over Bond Deal (subscriber content)

image: © C.P.Storm

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