Perhaps we shouldn’t be surprised, but the latest financial services firm to get caught up in the sprawling college admissions scandal is Morgan Stanley. The firm has fired one of its financial advisors for ‘not cooperating with an internal investigation’ into his relationship with disgraced admissions consultant Rick Singer, whom he introduced to a wealthy Chinese family that – according to the Wall Street Journal – paid a staggering $6.5 million bribe in 2017 to get their child into Stanford.
As we’ve reported, some of the Chinese families embroiled in the admissions scandal, which focuses on Singer, his former employees, and dozens of his customers, who employed him to help their kids cheat on admissions tests, bribe coaches and generally bend college admissions staff to his will.
WSJ reported yesterday that Morgan Stanley advisor Michael Wu, based in Pasadena-Calif., introduced Singer to the unnamed Chinese family that paid the largest sum exposed in the scandal. As we’ve pointed out, Chinese families and students actually have a good defense of their participation in the scheme: Given endemic levels of corruption in their home country, most said they simply assumed this was how things worked in the US, and that there was nothing untoward about the scheme.
Unfortunately for Wu, revelations that Singer’s firm had been on a referral list that the bank had provided to its wealth management clients have been deeply embarrassing for MS.
According to the FT, Wu connected the wealthy Chinese family with Singer, with whom he had continued to work after his name was taken off a referral list distributed to the bank’s financial advisors.
In a sign that this might not be the end of the road for Morgan Stanley, a spokesman said “we are co-operating with the authorities.” And MS isn’t alone among Wall Street firms: TPG has stripped a former portfolio manager of potentially millions of dollars worth of shares in some of its funds.
And former PIMCO CEO Douglas Hodge was among the parents charged in the investigation.
Considering that many of these families were introduced to Singer through their advisors, Wu’s might not be the last head to roll before it’s all said and done.