Finra fines Morgan Stanley $800K over 'deficient conflict of interest' disclosures

Morgan Stanley, owner of the world's largest brokerage, will pay $800,000 to settle regulatory claims that it didn't disclose research analysts' conflicts of interest to investors. The New York-based firm also failed to alert customers to the availability of independent research, the Financial Industry Regulatory Authority said today in a statement. The required disclosures didn't appear in more than 6,000 equity research reports and 84 public appearances from April 2006 to June 2010, Finra said. “This case strikes at the heart of Finra's research disclosure requirements, which were written in response to scandals involving research analyst conflicts of interest,” James Shorris, Finra's acting chief of enforcement, said in the statement. “Thousands of Morgan Stanley research reports did not include accurate information about the firm's relationships with the companies it covered, depriving potential investors of important information.” Morgan Stanley, which didn't admit or deny the allegations, previously settled a Finra case in 2005 which found the firm violated research analyst disclosure rules, the Washington-based industry regulator said. “Morgan Stanley initially reported this matter and cooperated fully with Finra,” Sandra Hernandez, a spokeswoman for the firm, said in an e-mailed statement. “Additionally, Morgan Stanley has developed and implemented improved systems for the publication of the required disclosures in response to this matter.”