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Morgan Stanley’s wealth arm being probed by multiple US regulators: What we know


Morgan Stanley’s wealth management arm is being probed by multiple regulators, the Wall Street Journal reported citing people in the know. The report claimed that US Securities and Exchange Commission, Office of the Comptroller of the Currency (OCC) and other Treasury Department offices are involved in the probe. Following the report, the bank’s shares fell 4.8% in late trading to $87.17.

This comes after Morgan Stanley resolved a years-long investigation into its block trading practices.(Reuters)

This comes after Morgan Stanley resolved a years-long investigation into its block trading practices and nominated former UK financial regulator Megan Butler to its board of directors.

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Regulators are assessing whether the bank sufficiently investigated the identities of prospective clients, sources of their wealth, and how it monitors their financial activity, the report claimed. The probe is also focussing on the bank’s international clients, it added. 

The US Securities and Exchange Commission and the Treasury’s Financial Crimes Enforcement Network have already sought information on certain clients outside the US who’ve raised red flags, the report said. Morgan Stanley has also been asked about why it did business with some who had been cut off by E*Trade which is the digital-trading platform the company acquired.

The unit caters to high net-worth individuals and small to medium-sized businesses and provides them with brokerage, custody, investment advisory and financial planning services. 

The unit generates steadier income compared with investment banking owing to the latter’s relationship to economic cycles. 



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