Morgan Stanley and Citigroup are deep in talks to merge their brokerage operations in a deal that could ultimately lead to Morgan Stanley taking over Citi's Smith Barney unit.
And the move raises some deep concerns among the Fast Money traders.
Merging Brokerage Operations
The deal would be structured as a joint venture, but would involve a payment from Morgan Stanley to Citi of an undisclosed sum that would give Morgan the larger stake in the venture.
Morgan Stanley would also have the right over a period of years to increase its stake in the joint venture and ultimately buy all of it, according to sources.
The move would combine Morgan's brokerage unit, with 8,000 brokers, and Smith Barney, which has 11,000 brokers. It would create the nation's largest single brokerage, surpassing Bank of America's newly acquired Merrill Lynch unit, which has 16,000 brokers.