Morgan Stanley's leaked list of 100-plus deals raises block-trade risks

"Link does not have any current transaction engagement with Morgan Stanley, nor have we engaged with them in any recent deal-related discussions," a Link REIT spokesperson said in an emailed statement ^[11]. The Hong Kong-based REIT was named on a document that combined deals the bank was working on with deals it was monitoring ^[3]. So at least one of the more than 100 entries had no live engagement behind it ^[21].

Rival bankers disagree on what the leak is worth. Several said they would use the list to target deals and court clients. Others said most of the deals were already known ^[7][8]. I think both are right, and which one applies depends on the type of deal. An IPO candidate in China, South Korea or India ^[3] that bankers already talk about loses little by showing up on a competitor's copy. A block trade depends on the market not knowing the shares are coming. Traders and investors have been monitoring the potential block trades named on the list ^[9].

The outcome could still go several ways. The China and India assessments could produce action, though people familiar with the matter said that is unclear ^[6]. Hong Kong's Securities and Futures Commission, which oversees the market where Morgan Stanley has ranked among the top underwriters of stock sales for years, said it does not comment on individual incidents ^[18][19]. Sponsors could also punish the bank when they next hand out mandates. The report that no client has disengaged so far comes from people familiar with the matter, and it covers only the days since the email ^[15]. Or the list could go out of date quickly, leaving the bank with a client-relations cost and little else.

I think the cash at risk sits with the sellers holding block positions on the list, or rather in the lower price their placements may now fetch once buyers expect the shares, and much less in an IPO pipeline that some rival bankers say was mostly known already ^[8][10]. The view is wrong if a named sponsor moves an IPO mandate away from Morgan Stanley in the coming months.

The bank is spending senior time on repair. It held urgent meetings with some private equity firms to apologize ^[20]. Atmani has personally met clients who received the list, while relationship bankers contact others one by one ^[12]. Employees were also ordered to take compliance training that covers misdirected emails, though it was not clear whether the training was a direct response to the leak ^[14]. "We promptly took steps to address this inadvertent sharing of information and we continue to engage with relevant parties," the bank said ^[16].