The Financial Industry Regulatory Authority Inc. has censured Morgan Stanley and fined the firm $325,000 for publishing research reports that included inaccurate historical stock ratings.
In its letter of acceptance, waiver and consent, Finra said that Morgan Stanley used a software program to generate price charts that appeared in its research disclosures. The firm revised the software on or around Aug. 30, 2019, to address new European Union regulatory requirements that required the disclosure of five years of information for a recommended security under certain circumstances.
The revised software contained a typographical error that caused the price charts in certain research reports to display stock ratings from five years prior to the report, but labeled those ratings, inaccurately, as being from three years prior to the report. The software error affected only the presentation of historical ratings within the price charts, Finra said.
A firm supervisory analyst identified an inaccurate historical stock rating in a price chart of a research report in January 2020 and escalated the issue. As a result of the price-chart software error, however, the firm published approximately 11,000 research reports between Aug. 30, 2019, and Feb. 28, 2020, that included price charts with inaccurate historical stock ratings.
Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.
Reshuffle provides strong indication of where the regulator's priorities now lie.
Goldman Sachs Asset Management report reveals sharpened focus on annuities.
Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.
Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.
How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave
