SHANGHAI  Since the height of China’s property boom, Morgan Stanley’s huge real estate deals here have been the envy of the industry. Then, scandal hit.

Last month, with property prices here and elsewhere in free fall, the bank dropped a bombshell: in a Securities and Exchange Commission filing, it said it had fired an executive in its China real estate division after uncovering evidence that he might have violated the United States Foreign Corrupt Practices Act, which bars American business people from bribing foreign officials.

That executive, Garth Peterson, was a star deal maker who had become a powerful figure on the Shanghai investment scene, people knowledgeable about the investigation said. His supervisor, the head of global real estate investing, was placed on administrative leave.

In China, which is struggling to deal with corruption and bribery, the revelation is the latest bit of sobering news after a wild real estate boom suddenly went bust late last year, leaving some of the world’s biggest financial institutions with potentially huge losses.