An investigation into possible insider trading by Morgan Stanley has reportedly begun, stemming from the firm’s acquisition of Dean Foods stock in March 2001.

The Securities and Exchange Commission is allegedly probing whether Morgan Stanley’s Strategist and 21st Century Trend funds benefited from company talks with Suiza Foods Corp., which bought Dean Foods in April 2001.

A source told The Wall Street Journal that a March 13, 2001 meeting between executives of Dean and Morgan Stanley included disclosure by both sides of sensitive information. Morgan denies the claims.

"Our view shows that all purchases of these shares were made based only on public information," Morgan Stanley spokesman Bret Galloway told Reuters. Morgan Stanley has not confirmed or denied that the investigation is taking place.

A huge part of the SEC probe is to find out whether Morgan Stanley’s two funds acquired about 900,000 shares of Dean Foods on March 16, 2001, according to The Journal.

On April 5, 2001, the day the announcement was made, Dean’s stock soared $5.37 per share to $37.87.

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