-Finra fines Morgan Stanley on transaction prices.
Global Banking News - 23 August 2013
The US Financial Industry Regulatory Authority (Finra) has fined Morgan Stanley (NYSE: MS) and its retail brokerage unit USD1m, alleging that the investment bank failed to ensure transaction prices involving certain bonds were favourable.
Morgan Stanley has neither admitted nor denied the charges, but consented to the entry of Finra's findings. Finra found that Morgan Stanley failed to use reasonable diligence to ensure that the purchase or sale price to the customer was as favourable as possible in 116 customer transactions involving corporate and agency bonds. Also, in 165 transactions involving municipal bonds, Finra said that Morgan Stanley failed to purchase or sell bonds at prices reasonably related to the fair market value of the subject security.
According to Morgan Stanley, the settlement involved less than 300 fixed-income transactions over a four-year period, during which more than four million such trades were conducted. Finra has not alleged any wilful or fraudulent conduct by the firm, it added.
'Morgan Stanley Wealth Management is committed to seeking the best execution reasonably available for our clients,' it said, adding that it cooperated with Finra's investigation.
The regulator also ordered Morgan Stanley to pay USD188,000 in restitution plus interest. 'Firms must ensure that customers who buy and sell securities, including corporate, agency, and municipal bonds, receive execution prices that are consistent with prices available in the marketplace,' said Finra market regulation executive vice president, Thomas Gira.
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|Publication:||Global Banking News (GBN)|
|Date:||Aug 23, 2013|
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