Morgan Stanley, November 16, 2011

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On November 16, 2011, the U.S. Securities and Exchange Commission (SEC) charged Morgan Stanley's investment management unit with violating securities laws in a bad fee arrangement.[1]

Charges

From the release:

"The SEC’s Enforcement Division Asset Management Unit has been focused on fee arrangements with registered funds. The SEC’s investigation found that MSIM — the primary investment adviser to The Malaysia Fund — represented to investors and the fund’s board of directors that it contracted a Malaysian-based sub-adviser to provide advice, research and assistance to MSIM for the benefit of the fund, which invests in equity securities of Malaysian companies. The sub-adviser did not provide these purported advisory services, yet the fund’s board annually renewed the contract based on MSIM’s representations for more than a decade at a total cost of $1.845 million to investors."

On November 16, 2011, Morgan Stanley agreed to pay $3.3 million in penalties to settle the charges.[2]

Related Documents

References

  1. SEC Charges Morgan Stanley Investment Management for Improper Fee Arrangement. SEC. Retrieved on November 16, 2011.
  2. Morgan Stanley Settles SEC Case. WSJ. Retrieved on November 16, 2011.