Morgan Stanley to pay $7.9 million

Morgan Stanley & Co. Inc. will pay $7.9 million for its failure to provide best execution to certain retail orders for over-the-counter securities, the Securities and Exchange Commission announced today.
MAY 09, 2007
Morgan Stanley & Co. Inc. will pay $7.9 million for its failure to provide best execution to certain retail orders for over-the-counter securities, the Securities and Exchange Commission announced today. New York-based Morgan Stanley embedded undisclosed mark-ups and mark-downs on certain retail OTC orders processed by its automated market-making system and delayed the execution of other retail OTC orders, for which Morgan Stanley had an obligation to execute without hesitation. All of Morgan Stanley’s revenues from its undisclosed mark-ups and mark-downs will be distributed back to the injured investors through a distribution plan, according to the SEC. Without admitting or denying the cmmission’s findings, Morgan Stanley consented to the entry of an order by the Commission that censures Morgan Stanley. The order also requires Morgan Stanley to pay disgorgement of $5,949,222 and prejudgment interest thereon of $507,978, and imposes a civil money penalty of $1.5 million. “By recklessly programming its order execution system to receive amounts that should have gone to retail customers, Morgan Stanley violated its duty of best execution and defrauded its customers,” said Linda Chatman Thomsen, Director of the regulator’s Division of Enforcement.

Latest News

Pontera unveils non-discretionary advice tools in continued retirement platform buildout
Pontera unveils non-discretionary advice tools in continued retirement platform buildout

Advisors gain a second workflow for 401(k) guidance as the fintech expands beyond bulk rebalancing, backed by new policy research on advice access.

HSA balances hit record high, but are clients using them wrong?
HSA balances hit record high, but are clients using them wrong?

New data shows most people do not have enough saved to cover costs and are not fully utilizing their accounts.

Advisor moves: LPL, Cetera, Raymond James, NewEdge Wealth
Advisor moves: LPL, Cetera, Raymond James, NewEdge Wealth

Firms announce new recruits this week, with teams overseeing hundreds of millions in client assets switching affiliations.

Stratos Wealth adds $400M with RPI Financial Life Planners
Stratos Wealth adds $400M with RPI Financial Life Planners

It’s the 12th deal for Stratos since SEI's investment and follows 11 acquisitions worth $4.8B in 2025.

Those without kids less confident about retirement savings, but why?
Those without kids less confident about retirement savings, but why?

Allianz Life research reveals a retirement confidence gap between childless Americans and parents.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income