Finra fines MSSB $1M for muni markups

Morgan Stanley Smith Barney, the world's largest brokerage, was fined $1 million by the Financial Industry Regulatory Authority for charging excessive markups and markdowns on bond transactions. The firm was also ordered to pay $371,000 in restitution and interest to customers, Finra said today in a statement. The brokerage charged “higher than warranted” markups and markdowns, as much as 13.8 percent, on corporate and municipal bond deals, Finra said. In settling the claims, Morgan Stanley consented to the findings without admitting or denying wrongdoing, Finra said. Finra also ordered New York-based Morgan Stanley to revise procedures for reviewing markups and markdowns in fixed-income transactions. Morgan Stanley Smith Barney, which had $1.6 trillion in client assets as of Sept. 30, is a joint venture between Morgan Stanley, which controls the unit, and Citigroup Inc. “Morgan Stanley Smith Barney cooperated fully with Finra, and is pleased to settle this matter,” Christine Pollak, a Morgan Stanley spokeswoman, said in an e-mailed statement. “The trades in question represent a tiny fraction of the millions of trades executed for clients during the time period, and we are continuing to improve our control processes governing pricing.” --Bloomberg News--