Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE

Friday, September 30, 2011

Justice Department Requires Morgan Stanley to Disgorge $4.8 Million in Profits from Anticompetitive Agreement

Derivative Contract Led to Higher Prices for Electricity Generating Capacity in New York City

WASHINGTON – The Department of Justice today announced a settlement with Morgan Stanley that requires Morgan to pay $4.8 million for violating the antitrust laws by entering into an agreement with KeySpan Corporation that restrained competition in the New York City electricity capacity market. The department said the agreement likely resulted in a price increase for electricity retailers, which, in turn, led to increased electricity prices for consumers.

The department’s Antitrust Division today filed a civil antitrust complaint in U.S. District Court for the Southern District of New York and submitted a proposed settlement that, if approved by the court, would resolve the lawsuit. The settlement provides for disgorgement of profits for a violation of the antitrust laws and requires Morgan to pay $4.8 million to the United States. The department previously entered into a settlement with KeySpan that required the company to disgorge $12 million in profits for its role in the agreement, which was approved by the court in February 2011.

“This settlement with a major financial institution will signal to the financial services community that use of derivatives for anticompetitive ends will not be tolerated,â€