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Morgan Stanley was fined 20 million euros ($22.1 million) by French regulators after the bank’s London desk was accused of using “pump and dump” tactics to manipulate sovereign bond prices.

The Autorite des Marches Financier’s enforcement committee said that the bank manipulated the prices of 14 French government bonds and 8 Belgian bonds in June 2015. The lender also manipulated the price of a French government bond futures contract, the AMF said in a statement Tuesday.

At a hearing last month, AMF investigators said the bank’s London desk was long on French bonds and short on German debt, betting the spread would narrow. But the opposite scenario played out as Greece’s impasse with creditors deepened, causing the desk to lose $6 million on June 15, 2015, and another $8.7 million when markets opened the next day.

To narrow its losses and avoid hitting a $20 million loss-limit set by Morgan Stanley’s management, the London desk allegedly acquired futures on French and German bonds on June 16, 2015, with the sole objective of increasing the market value of French and Belgian bonds before massively and instantaneously selling the latter.

Morgan Stanley said it would appeal the decision.

“The activities in question were undertaken in accordance with market practice and as part of the firm’s role and obligations as a market maker and Morgan Stanley remains confident that it has acted in the best interests of the market and its clients,” the bank said in a statement.

During the hearing, Morgan Stanley said it “absolutely and categorically rejects the AMF’s allegations.” Stephane Benouville, a lawyer for the bank, said the accusations didn’t stand up to scrutiny and added that fining Morgan Stanley would send a message that market makers aren’t allowed to hedge themselves and exit risky positions.

To contact the reporters on this story: Gaspard Sebag in Paris at gsebag@bloomberg.net;Stephanie Bodoni in Brussels at sbodoni@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser

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