Morgan Stanley fined $225,000 over questionable muni bond trades

SEC: Firm was swapping bonds for clients with no alleged benefit to the customer

Sep 19, 2019 @ 2:31 pm

By Bruce Kelly

The Securities and Exchange Commission on Tuesday said it was fining Morgan Stanley $225,000 for allegedly recommending unsuitable municipal bond transactions to its customers.

Morgan Stanley, from June 2013 through December 2017, recommended 135 swap transactions to its retail customers in which the customers sold one municipal bond while purchasing another municipal bond that was nearly identical to the bond sold or provided no apparent economic benefit to the customer, according to the SEC order.

Register now for our ESG & Impact Forum at the U.N. on Dec. 5.

The SEC also found that Morgan Stanley did not document information about the customers that indicated that any of the swaps were suitable for the clients. The firm received over $340,000 in commissions and fees upon execution of the transactions, which Morgan Stanley returned, with interest, to clients.

Morgan Stanley consented, without admitting or denying the SEC's findings.

"We are pleased to have resolved this matter," said company spokeswoman Christine Jockle.


What do you think?

View comments

Recommended next


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print