Morgan Stanley will pay $4.4 million to settle a class action with brokerage clients for telling them that they had purchased precious metals and paid for their storage fees, according to a Reuters report.
The settlement, which is subject to approval by the Federal District Court in Manhattan, includes $1.5 million in cash and other benefits valued at about $2.9 million, according to the report.
The August 2005 suit said that Morgan Stanley told clients it was selling precious metals that clients would own and that the company would store.
However, New York-based Morgan Stanley either made no investment specifically on behalf of those clients or made entirely different investments of lesser value and security.
The suit was filed by Selwyn Silberblatt, on behalf of himself and others, who bought the precious metals -- gold, silver, platinum and palladium in bullion bar or coins -- between February 1986 through January 2007 from Morgan Stanley Dean Witter Inc. and its predecessors and paid fees for their storage.