Morgan Stanley Ordered to Pay $7.5 million for Misusing Customer Cash
Posted: Mon Dec 19, 2016 5:23 pm
Morgan Stanley & Co. agreed to pay $7.5 million to settle the Securities and Exchange Commission charges that it misused customer cash to lower the firm’s borrowing costs in violation of the SEC’s Customer Protection Rule.
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The SEC found that Morgan Stanley violated the commission’s Customer Protection Rule by misusing customers’ cash and securities that should have been deposited in a reserve account. The firm engaged in transactions with an affiliate that artificially reduced the required deposit of customer cash in the reserve account.
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