Morgan Stanley suspends two over payment to middleman

NEW YORK -- (AP) -- Morgan Stanley Dean Witter has suspended two executives in connection with a $10,000 payment to a police informant whose information helped lead to the arrest of a former employee.

The executives, who were not identified, were suspended with pay pending the outcome of an investigation, the firm announced Thursday.

Morgan Stanley, the nation's largest securities firm, said it had made a ``mistake in judgment'' last year when it paid a middleman, Charles Joseph Luethke, to help set up a police sting operation against Christian Curry.

Curry had been fired and was contemplating filing a discrimination claim against the firm when the sting was arranged.

The firm had maintained Curry was fired for expense account abuses. Curry said it was because he is black and was thought to be homosexual because nude photos of him appeared in a gay men's magazine.

Curry, 25, was arrested last summer by undercover police who said they had caught him conspiring to plant racist e-mail in the firm's computer system, apparently to support his planned discrimination case.

Luethke, a college acquaintance of Curry's, had tipped the firm to the alleged e-mail scheme, and then put Curry in touch with a computer hacker -- actually an undercover police officer.

Prosecutors have said Morgan Stanley wired $10,000 into an account for Luethke within days of Curry's arrest.

After learning of the payment, prosecutors last week dropped the charges against Curry.

Curry filed a discrimination and wrongful arrest lawsuit last week against Morgan Stanley. He is seeking $1.35 billion in damages.