November 14, 2011 Comments (0) Blog, Securities Fraud

Excessive Markups and Markdowns Cost Morgan Stanley a $1 Million Fine

(Last Updated On: July 17, 2015)

According to a Financial Industry Regulatory Authority (FINRA) press release, “it has fined Morgan Stanley & Co. Inc. and Morgan Stanley Smith Barney LLC $1 million and ordered $371,000 in restitution and interest to customers for excessive markups and markdowns charged to customers on corporate and municipal bond transactions, and related supervision violations.”

The issues that FINRA alleges are related to Morgan Stanley charging, “…markups and markdowns ranging from below 5 percent to 13.8 percent on corporate and municipal bond transactions.” FINRA found these markups and markdowns to be “higher than warranted given factors including market conditions, the cost of executing the transactions and the value of the services rendered to the customers.” A FINRA executive was quoted as saying “Morgan Stanley clearly violated fair pricing standards and FINRA will continue to require firms that violate such standards to make their customers whole.”

The FINRA findings indicate that “…Morgan Stanley’s supervisory system for corporate and municipal bond markups and markdowns was inadequate.” FINRA has “ordered [Morgan Stanley] to revise its written supervisory procedures regarding supervisory review of markups and markdowns in fixed income transactions with its customers.” While Morgan Stanley has “…consented to the entry of FINRA’s findings.” they have not “…admitted nor denied the charges.”

If you are concerned about your Morgan Stanley account would like to speak to a securities attorney about your investor rights please call our Chicago office at 312-238-9650.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.

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