Harry Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

FCPA Blog Daily News

« Supreme Court limits SEC disgorgement power | Main | Eduard Ivanov: How much ‘hard law’ is good for anti-corruption compliance? »

Ex-Morgan Stanley trader hid Venezuela bond trades from compliance reviews

The Financial Industry Regulatory Authority (FINRA) barred a former Morgan Stanley representative for concealing the customers behind around $190 million in Venezuelan bond trades.

John Batista Bocchino hid the customers' trades from Morgan Stanley by creating hundreds of documents containing false information, including new account forms and trade tickets, FINRA said Thursday.

He used the documents to open accounts in the names of other financial institutions. 

"Unbeknownst to these financial institutions, Bocchino executed approximately 300 Venezuelan bond trades in the accounts opened in their names," FINRA said.

Morgan Stanley had restricted trading in Venezuelan bonds due to regulatory and anti-money laundering concerns as well as risks to its reputation.

Because he hid the real customers behind the accounts and trades from Morgan Stanley, the firm couldn't "conduct appropriate suitability and anti-money laundering reviews of the activity," FINRA said.

"In fact, several of the underlying customers presented regulatory concerns, at least three were not customers of Morgan Stanley and were not approved to trade through the firm, and one previously had its account frozen by the firm," according to FINRA.

Bocchino's sales assistant at Morgan Stanley, Rafael Barela Jacinto, was suspended for a year and fined $10,000 for creating firm documents containing false information, FINRA said.

FINRA is an independent Wall Street regulator overseen by the SEC.

The Bocchino "order accepting settlement" is here (pdf).


Richard L. Cassin is the publisher and editor of the FCPA Blog.