Morgan Stanley's Investment Unit Agrees $2.2m Settlement with FINRA

Morgan Stanley Smith Barney has agreed to pay a fine of $2.2 million to the US Financial Industry Regulatory Authority (FINRA), after the watchdog alleged that the firm submitted millions of inaccurate reports to the Options Clearing Clearing Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Clearing is a general term that simply means many different things depending on the subject and related industry. Most commonly, this refers to the reciprocal exchange between banks of checks and drafts, and the settlement of the differences, or the total of claims settled at a clearinghouse. In finance and banking, the word clearing has different meanings depending on the more specific business model. Moving checks from the bank where they were deposited to the bank on which they were drawn. Th Read this Term Corp, violating FINRA rules, according to a Reuters report today.

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FINRA claimed that in over 13 million situations, the wealth management firm sent reports on its large options positions, which missed details such as tax identification numbers, had wrong account type details and incomplete address fields.

FINRA typically tracks reports like those that Morgan Stanley submitted in order to identify holders of large option positions who could be, in addition to other things, attempting to manipulate the market.

Previously Fined

This is not the first time that FINRA has pulled up Morgan Stanley Smith Barney for inaccuracies.

The US regulatory authority fined the bank’s investment unit $650,000 last year following a series of warnings dating back to 2011 when FINRA alerted the company to “significant gaps in its systems”, noting that its monitoring of the transmittal of customer funds to third parties was sub-standard.

According to a statement at the time, Morgan Stanley Smith Barney “failed to implement reasonable supervisory systems and procedures” to monitor for wires from multiple customer accounts to in some cases the same, third-party accounts.

FINRA found that three registered representatives were able to fraudulently transfer customer funds to their own personal bank accounts or other self-interested receivers which resulted in the imposition of the aforementioned fine.