Morgan Stanley is an investment banking and retail brokerage firm. Arising out of the enactment of the Glass-Steagall Act, Morgan Stanley separated from JP Morgan in 1935 and became its own investment banking firm. Dean Witter Reynolds was a brokerage firm that began in San Francisco in 1924 and catered to the middle class. In 1997, Morgan Stanley purchased Dean Witter and became Morgan Stanley Dean Witter & Co. Out of a concern for branding, the firm returned to the original name of Morgan Stanley in 2001.
Headquartered in New York City, the main areas of business for Morgan Stanley today are global wealth management, institutional securities, and investment management. The company is a leading issuer of credit cards, particularly the Discover Card.
A securities brokerage firm licensed by FINRA, Morgan Stanley has a legal duty to supervise its brokers and its brokers' recommendations to clients to ensure compliance with and prevent violations of the rules of the security industry. When an individual broker is negligent or acts in an unlawful manner against the interests of the client and that client suffers damages as a result of such wrongdoing, the firm may be held liable for the investor's losses.
Morgan Stanley and its brokers have been the subject of various misconduct claims in the past. In 2010, United States prosecutors began to investigate Morgan Stanley's "Dead Presidents" deal. The deal involved misleading investors in the area of mortgage securities. Prosecutors believed that Morgan Stanley placed bets against collateralized-debt obligations (CDOs). Morgan Stanley did not market these deals, but they did play a role in creating and betting against them.
Around the same time, FINRA fined Morgan Stanley $800,000 for violating federal regulations regarding disclosing potential conflicts of interest in analyst research notes. According to FINRA, Morgan Stanley failed to provide honest and proper disclosures in more than 6,000 research reports and more than 80 public appearances.
In 2011, Morgan Stanley had to pay in excess of $1.3 million in fines and restitution because of excessive markup/down misconduct in bond transactions. "Markups" and "Markdowns" describe bond transactions between customers and brokers in which the customer pays a little more or somewhat less than the broker's purchase price. Typical markups range from one to five percent, but Morgan Stanley participated in excessive markups and markdowns from five to 13.8 percent.
Did you lose money because of investment misconduct by Morgan Stanley or one of its brokers? Meyer Wilson is here to help. Our law firm is considered an authority on these issues. We have the experience and resources necessary to represent clients in investor claims against brokerage firms like Morgan Stanley through The Financial Industry Regulatory Authority (FINRA), the American Arbitration Association (AAA) and private arbitration. If you are a resident of another country, Meyer Wilson may also be able to represent you in claims against a U.S. brokerage firm through FINRA. To determine whether you have a case against Morgan Stanley for your losses, call us toll-free or complete our online form to request a free case evaluation.
