FINRA fines Morgan Stanley $1 million

FINRA fines Morgan Stanley $1 million for matters involving certain bonds

Associated Press

WASHINGTON (AP) -- Morgan Stanley is being fined $1 million by an independent regulator for matters involving corporate and agency bonds and municipal bonds.

The Financial Industry Regulatory Authority said Thursday that the firm is being fined the $1 million, and being ordered to pay $188,000 in restitution plus interest, for failing to provide best execution in certain customer transactions involving corporate and agency bonds, and failing to provide a fair and reasonable price in certain customer transactions involving municipal bonds.

FINRA said that the restitution payment is in additional to restitution that Morgan Stanley previously paid to customers for transactions covered by the settlement.

FINRA found that Morgan Stanley failed to use reasonable diligence in 116 customer transactions with corporate and agency bonds to make sure that the purchase or sale price to the customer was as favorable as possible under current market conditions. The industry watchdog said Morgan Stanley also failed to purchase or sell bonds at prices reasonably related to the fair market value in 165 transactions involving municipal bonds.

Morgan Stanley did not admit or deny the charges, but consented to FINRA's findings.

Earlier this month FINRA fined Oppenheimer & Co. $1.4 million for selling unregistered penny stock shares and failing to have an adequate compliance program to detect and report suspicious penny-stock transactions. Oppenheimer is a unit of New York-based Oppenheimer Holdings Inc.

Last month Morgan Stanley agreed to pay $100,000 to settle claims the company violated New Jersey law in its sale of nontraditional exchange-traded funds.

Morgan Stanley's stock added 42 cents to $26.43 in morning trading.

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