NASD Fines Morgan Stanley Firms $2.9 Million for Widespread Violations of NASD Rules - Number and Scope of Violations Indicate Extensive Reporting Problems at Both Firms
Washington, D.C. — NASD announced today that it has imposed fines totaling $2.9 million against Morgan Stanley & Co., Inc. (MSCO) and Morgan Stanley DW Inc. (MSDW) for extensive violations dealing with reporting obligations, best execution, short sales, and a range of other NASD, Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB) rules...
NASD also found a variety of other regulatory violations at both firms. NASD found that MSCO:
- failed to timely report or incorrectly reported thousands of transactions through the Nasdaq Market Center in Nasdaq National Market securities, OTC Equity securities and listed securities;
- executed thousands of short sales transactions without ensuring that the firm could deliver or arrange to borrow the securities by the settlement date;
- failed to execute hundreds of customer trades at the best available price, and will make nearly $5,000 in restitution payments to affected customers;
- failed to report or incorrectly reported thousands of transactions in corporate bonds; and
- created locked and crossed market conditions in hundreds of instances.
NASD found that MSDW:
- failed to send, or failed to send in a timely manner, required documents to hundreds of customers in connection with municipal bond transactions;
- failed to report or incorrectly reported thousands of transactions in corporate and municipal bonds; and
- failed to enforce the firm's written supervisory procedures with respect to municipal bonds.
In settling these matters, MSCO and MSDW neither admitted nor denied the charges, but consented to the entry of NASD's findings.
To read the entire article, click http://www.nasd.com/PressRoom/NewsReleases/2006NewsReleases/NASDW_017308
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