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Traders work on the floor of the New York Stock Exchange near the Goldman Sachs stall.


In the years after he left Toronto, Edward Glenn Hadden sprinted to the very top levels of Wall Street, a route reserved for only the toughest and most talented of traders.

Now Mr. Hadden, who heads global interest-rate trading at Morgan Stanley, faces a new kind of uphill climb: a probe into potentially improper transactions, according to a regulatory filing.

The trading under investigation took place in late 2008, when Mr. Hadden was working at Goldman Sachs Group Inc. It concerns sales or purchases of government bond futures, the filing said, without providing further explanation.

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A lawyer for Mr. Hadden, James Benjamin of Akin Gump Strauss Hauer & Feld LLP, denied that his client had done anything improper.

The inquiry "concerns technical risk management activity in a one-minute period four years ago," Mr. Benjamin said in an e-mailed statement. "There is no legal or factual basis for any suggestion of market manipulation."

Reached by phone, Mr. Hadden, 42, referred all inquiries to a spokesman for Morgan Stanley. The spokesman confirmed that Mr. Hadden remains at the firm in his current position.

The probe, first reported by The New York Times, is being carried out by investigators at CME Group Inc., a giant operator of commodities and futures exchanges that also regulates the activities of its members.

After learning that Mr. Hadden was under scrutiny, Morgan Stanley and Goldman filed reports with the Financial Industry Regulatory Authority, or Finra, earlier this fall. Finra alerts investors to any investigations into brokers by listing them on their individual records.

According to Mr. Hadden's Finra record, the investigation remains pending. If the CME determines he broke its rules, he could face a variety of penalties, including monetary fines, a temporary suspension from trading, or even an outright ban, although such a step is rare.

A spokesman for the CME declined to discuss the probe or any possible consequences. A spokesman for Goldman Sachs also declined to comment on the investigation.

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One of the most prominent Canadians in finance and a vocal Toronto Argonauts fan, Mr. Hadden began his career on Bay Street after graduating from the University of Western Ontario in 1992. Four years later, he joined Goldman Sachs in Toronto before moving to London and later New York, where he became the head of U.S. government bond trading.

Along the way, he obtained a coveted prize – a partnership at Goldman – and early last year, joined a rival firm, Morgan Stanley.

In an unusual move, Mr. Hadden was placed on paid leave for roughly a year before his departure from Goldman.  The firm took the step after regulators at the Federal Reserve Bank of New York complained about Goldman's trading involving government bonds, according to a person familiar with the matter.

During Mr. Hadden's leave, his unexplained absence left even his own clients perplexed. "It's one of the enduring mysteries of the credit crunch," wrote The Wall Street Journal in August, 2010. "What happened to Edward Glenn Hadden?"

After a brief break from trading, Mr. Hadden joined Morgan Stanley in 2011. He is credited with helping to spur the firm's bond business (despite a few high-profile missteps, including bets last year on U.S. inflation expectations, in which Mr. Hadden and his team lost "tens of millions of dollars," according to The Wall Street Journal).

Mr. Hadden was also instrumental in reopening Morgan Stanley's Canadian fixed-income trading arm in Toronto this past summer, after the investment bank shut the original operation years ago. Betting that demand for Canadian bonds would stay hot, Mr. Hadden tapped a former colleague, Kim Mohammed, who was previously at TD Securities, to run the operation.

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It's unclear how long it will take for the probe to produce a formal action or outcome. Particularly with a senior Wall Street figure like Mr. Hadden, "regulators would want to have everything nailed down" before proceeding, said Pearl Zuchlewski, a lawyer in New York who specializes in employment disputes in the financial industry.

Mr. Hadden's ties to Toronto remain strong. He is currently on the board of the Toronto Argonauts Foundation, has hosted Grey Cup parties in Toronto and he set up his own charity, the Hadden Family Foundation, to aid Canada's urban at-risk communities.

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About the Authors
U.S. Correspondent

Joanna Slater is an award-winning foreign correspondent for The Globe based in the United States, where her focus is business and economic news and New York City.Her career includes reporting assignments in the U.S., Europe and Asia. In 2015, she was posted in Berlin, Germany, where she covered Europe’s refugee crisis. More

Reporter and Streetwise columnist

Tim Kiladze is a business reporter with The Globe and Mail. Before crossing over to journalism, he worked in equity capital markets at National Bank Financial and in fixed-income sales and trading at RBC Dominion Securities. Tim graduated from Columbia University's Graduate School of Journalism and also earned a Bachelor in Commerce in finance from McGill University. More

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