U.S. Probe Casts Shadow Over Morgan Stanley’s China Expansion

American investment bank Morgan Stanley’s drive to expand its business presence in China hit a speed bump after U.S. regulators questioned its block trading operations.

The Wall Street giant faces closer scrutiny by China’s securities regulator, which may slow its plan to take greater control of its China fund management business. Chinese regulations stipulate that foreign financial institutions should have no record of violations within three years before such a transaction.