Morgan Stanley (MS:US)’s head of interest-rates trading, Glenn Hadden, was suspended from accessing all CME Group Inc. trading floors for 10 days to resolve claims tied to his 2008 transactions in Treasury futures.
The sanctions, including an $80,000 fine, stem from Hadden’s handling of trades while at Goldman Sachs Group Inc. (GS:US), according to a statement today from the Chicago Board of Trade. New York-based Goldman Sachs also was fined $875,000 for failing to supervise employees, the CBOT said.
The CBOT’s business conduct committee found that Hadden didn’t liquidate a large position in Treasury futures in an orderly manner required by the exchange’s rules. Hadden made orders in the final minute prior to expiration of a 10-year futures contract on Dec. 19, 2008, and the price rose in the process, according to the panel’s findings.
“This matter arose from standard risk management procedures for Treasury note futures contracts,” James Benjamin, Hadden’s attorney at Akin, Gump, Strauss, Hauer & Feld LLP, said in an e-mailed statement. “Although Mr. Hadden acted in good faith and attempted to follow a textbook approach, he had difficulty liquidating the futures position in an orderly manner in light of stressed and illiquid market conditions.”
Hadden and Goldman Sachs didn’t admit or deny violations in settling. The suspension starts on July 15, according to the CBOT’s statement.
Mark Lake, a spokesman for New York-based Morgan Stanley, said Hadden remains the firm’s head of global rates.
“We’re pleased to have resolved this matter,” said Michael DuVally, a Goldman Sachs spokesman.
Hadden worked at Goldman Sachs from 1996 through 2010, according to his employment record with the Financial Industry Regulatory Authority. He rose to head of U.S. government-bond trading at Goldman Sachs and was named a partner in 2008. Morgan Stanley hired him in 2011 to turn around its interest-rates business.
Interest-rates trading involves buying and selling products including U.S. Treasury notes and bonds, other government debt, inflation-linked securities and interest-rate derivatives.
To contact the reporter on this story: Michael J. Moore in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Scheer at email@example.com