Morgan Stanley agrees to a $249 million settlement for breaching confidentiality in stock trades, leading to $72.5 million in illicit gains for hedge funds from 2018 to 2021. The charges involve leaked information by trading staff, contradicting the bank s touted privacy measures. Pawan Passi, the former head of the equity syndicate desk, faces a $250,000 penalty. The deferred prosecution agreement acknowledges Morgan Stanley s cooperation but emphasizes its false assurances and privacy breach. The SEC also reaches a civil settlement. Morgan Stanley s shares dip 0.8% post-announcement.