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Morgan Stanley banker branded Mike Ashley ‘dishonest’ in $1bn trading row

Mike Ashley, chief executive of Morgan Stanley has been dragged into a legal battle between
Mike Ashley is suing Morgan Stanley for €47m - Jamie Lorriman

One of Morgan Stanley’s most senior dealmakers branded Mike Ashley “dishonest” after the Wall Street bank threatened to cancel his €220m bets on Hugo Boss.

Simon Smith, joint global head of investment banking, allegedly warned that the retail billionaire is “not a client with whom we wanted to do business” after Morgan Stanley demanded $1bn from Mr Ashley’s retail empire Frasers Group.

According to written evidence shared with the High Court, Mr Smith allegedly shared these objections with the banker behind the cash call, Christopher Good.

Mr Ashley is suing Morgan Stanley for €47m over its attempts to force Frasers to abandon its stock market bets on German fashion brand Hugo Boss in May 2021.


The US investment bank threatened to close out the trades using a process called a margin call, which ultimately required Frasers to provide extra funds to cover a potential 400pc move in Hugo Boss’s share price.

Morgan Stanley did not deal directly with the Sports Direct founder but instead passed the margin call to Saxo Bank, an intermediary. Frasers was ultimately forced to transfer the trades to rival bank HSBC.

Mr Good, head of Morgan Stanley’s risk management team, said in written evidence that he triggered the $915m margin call after being “extremely concerned” about the large single stock position.

When later exploring whether Frasers could post Hugo Boss stock as collateral, the senior risk manager said he called Mr Smith as a last resort to “get some colour” on why he previously decided against doing business with Mr Ashley.

Mr Good said: “Simon told me that he had concerns about Mike Ashley, one of which was that he is known for being litigious, and took the view that he was not a client with whom we wanted to do business.”

Mr Good told the High Court on Friday that Mr Smith also described the entrepreneur as “untrustworthy or dishonest”.

The conversation came months after Mr Smith allegedly rejected an attempt by Mr Ashley to open a prime brokerage account over “animus” towards him.

The brokerage account would have provided Frasers access to the full range of financial tools used by institutions and hedge funds to play the markets.

In his written testimony, Mr Good said he didn’t want to be “backed into a position” of dealing with Frasers directly, considering Morgan Stanley had already rejected them.

He said: “The fact that Frasers was back-dooring us – doing business with us via Saxo that Morgan Stanley had rejected – was a separate aggravation: I still had a risk [the Hugo Boss trades] which I needed to be removed.”

Mr Good claims he “knew nothing about” either Frasers or Mr Ashley when making the margin call.

He denies there was any “conspiracy” behind the margin call, nor “any intention to harm Frasers”.

Morgan Stanley rejects the claim as contrived and without merit.

The case continues.