Morgan Stanley is a broker-dealer and registered investment adviser headquartered in New York City. Morgan Stanley was founded in 1935 by J.P. Morgan & Co. partners Henry Sturgis Morgan and Harold Stanley (among others). The firm has 75,000+ employees and was ranked number 61 in the 2021 Fortune 500 list of the largest U.S. corporations by total revenue.
Morgan Stanley reported net revenue of $53.7B and net income of $11B for 2022. The firm services 41 countries across the globe. Its brokers are licensed in all 50 states as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Financial Misconduct at Morgan Stanley
Morgan Stanley is licensed by the Financial Industry Regulatory Authority (FINRA), and as such is legally obligated to ensure its brokers are acting lawfully in the interest of their investors. If a client suffers losses as a result of negligent behavior or misconduct from a broker, then the firm may be held legally responsible to repay the damages.
Morgan Stanley and brokers backed by Morgan Stanley have a long history of misconduct and complaints, as documented by FINRA’s BrokerCheck report.
In September 2022, Morgan Stanley was ordered to pay $125M to the SEC as one of five large banks that was found not to have monitored how its employees were communicating on work-related matters or maintaining appropriate records of their messages, as is required by federal law. From 2018 to 2021, many of the firm’s employees were routinely using messaging apps, such as WhatsApp, and other services on personal phones to communicate with one another rather than emails and other official methods of communication.
In November 2022, Morgan Stanley was censured, fined $200,000, and ordered to pay $497,897, plus interest, in restitution to customers after FINRA found that from 2014 through 2018 the firm failed to reasonably supervise nine registered representatives who recommended potentially high-risk securities to 62 customers in violation of the firm’s plan of solicitation policy. Some of the firm’s representatives made hundreds of recommendations for securities that were high-risk and inconsistent with some of their customers’ moderate or conservative risk tolerances. Despite receiving alerts of these violations, the firm failed to take adequate action. As a result, these customers suffered losses for many of the recommended trades.
In December 2022, Morgan Stanley was censured and ordered to pay $802,483.47 in restitution plus interest after FINRA found that between January 2015 and December 2021, the firm’s supervisory system failed to provide certain customers with mutual fund sales charge waivers or fee rebates to which they were entitled.
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Meyer Wilson reclaimed $350 million for the victims of investment fraud or misconduct. Our attorneys are experienced in going up against the largest investment firms, such as Morgan Stanley, and our track record affirms our resources and expertise. Meyer Wilson has represented clients nationwide and internationally, in state and federal courts, and in securities arbitration. As an investor, you have a right to recover investments lost through unethical behavior or decisions made against your interests.
