Morgan Stanley. Photo: C. Ryan Barber/ ALMMorgan Stanley Fined $10M for Failing to Supervise Anti-Money Laundering Program
FINRA, the nonprofit organization that protects investors and market integrity, concluded that Morgan Stanley's anti-money laundering (AML) program failed to meet the requirements of the Bank Secrecy Act because of three major issues.
December 26, 2018 at 04:41 PM
2 minute read
The Financial Industry Regulatory Authority has issued a $10 million fine against the broker-dealer Morgan Stanley Smith Barney LLC after concluding it failed to properly supervise an anti-money laundering program over a period of five years.
FINRA, the nonprofit organization that protects investors and market integrity, concluded that Morgan Stanley's anti-money laundering (AML) program failed to meet the requirements of the Bank Secrecy Act because of three major issues:
First, Morgan Stanley's automated AML surveillance system didn't receive data from several systems, “undermining the firm's surveillance of tens of billions of wire and foreign currency transfers.” Second, it “failed to devote sufficient resources to review alerts generated by its automated AML surveillance system,” according to the news release. And third, Morgan Stanley didn't “reasonably monitor customers' deposits and trades in penny stock for potentially suspicious activity, despite the fact its customers deposited almost 2.7 billion shares of penny stock, which resulted in sales totaling approximately $164 million.”
FINRA also concluded that Morgan Stanley “failed to establish and maintain a supervisory system that complies with Section 5 of the Securities Act of 1933 which generally prohibits the sale of unregistered securities,” the release said.
Susan Schroeder, FINRA executive vice president, department of enforcement, said in a prepared statement: “As we stated in our 'Report on FINRA Examination Findings' released earlier this month, FINRA continues to find problems with the adequacy of some firms' overall AML programs, including allocation of AML monitoring responsibilities, data integrity in AML automated surveillance systems, and firm resources for AML programs.” She added, “firms must ensure that their AML programs are reasonably designed to detect and cause the reporting of potentially suspicious activity.”
Morgan Stanley neither admitted nor denied the charges, but consented to the entry of FINRA's findings.
“We are pleased to have resolved this matter from several years ago,” according to a statement released by Morgan Stanley. “We continuously work to strengthen our controls and have been recognized by FINRA for the extraordinary steps we have taken to expand and enhance our AML program.”
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
How Amy Harris Leverages Diversity to Give UMB Financial a Competitive Edge
5 minute read
Dog Gone It, Target: Provider of Retailer's Mascot Dog Sues Over Contract Cancellation
4 minute read
Lululemon Faces Legal Fire Over Its DEI Program After Bias Complaints Surface
3 minute read
GC Conference Takeaways: Picking AI Vendors 'a Bit of a Crap Shoot,' Beware of Internal Investigation 'Scope Creep'
8 minute readTrending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
