Morgan Stanley shares fall as it reportedly faces probe into sales of mortgage securities

Morgan Stanley shares drop on reported probe

NEW YORK — Morgan Stanley shares are falling in premarket trading following a report that the investment bank is facing an investigation into mortgage derivative deals.

The Wall Street Journal says federal prosecutors are investigating whether Morgan Stanley misled investors about its role in a pair of derivatives whose performance was tied to mortgage-backed securities.

A spokesman from Morgan Stanley says the bank has not been contacted by the Justice Department and has no knowledge of an ongoing investigation.

Morgan Stanley shares are down $1.10, or 3.9 percent, at $27.28 in pre-opening trading Wednesday.