CFTC hits Morgan Stanley with a $14 million fine

The U.S. Commodity Futures Trading Commission on Thursday fined Morgan Stanley Capital Group $14 million and UBS Securities $200,000 for concealing a large trade from its clearinghouse, the New York Mercantile Exchange. 

The penalty centers on crude oil futures contracts that were not reported to the exchange within 5 minutes of the trade being executed.  

NYMEX stipulates that these trades must be reported within this timeframe. 

The trades were executed around mid-day on Feb. 6, 2009, but traders did not notify the Exchange about them until after the market had closed, the CFTC claims. 

Aside from the fine, Morgan Stanley agreed to educate its traders on the NYMEX trading rules. 

Action against the bank comes as the Senate prepares to begin debate next week on financial reform legislation. A chief reason for creating the bill is to shed more like on commodity trades, like oil futures.