Search Mark
Home / Industry Dynamics

Multiple Federal Regulators Probe Morgan Stanley’s Wealth Division 


Today’s News 

Federal regulators are scrutinizing Morgan Stanley’s wealth management segment to ensure thorough assessment of clients for money laundering risks. 
Image Source: Bloomberg 

Multiple federal regulators are probing Morgan Stanley’s wealth management segment to ensure it effectively assesses clients for potential money laundering risks. The Securities and Exchange Commission (SEC), alongside the Office of the Comptroller of the Currency and other Treasury Department entities, are leading investigations into this matter.  

These inquiries, coupled with a prior investigation by the Federal Reserve, raise concerns regarding Morgan Stanley’s diligence in vetting clients and monitoring their financial activities, especially those with international ties. 

James Gorman, Morgan Stanley’s executive chairman, has acknowledged the regulatory scrutiny, emphasizing the firm’s dedication to strengthening compliance measures through investments in technology and artificial intelligence. The SEC has raised specific questions regarding Morgan Stanley’s vetting processes, highlighting instances where the firm’s financial advisers maintained relationships with clients flagged by E*Trade for suspicious activity. 

FinCEN has also become involved, issuing a list of client names to Morgan Stanley, some of which overlap with those provided by the SEC, and requesting information on the firm’s sanctions policies. The Office of the Comptroller of the Currency, after examining Morgan Stanley’s anti-money laundering protocols, issued a formal notice urging improved customer due diligence. 

Despite being a cornerstone of Morgan Stanley’s post-financial crisis strategy, the wealth management division has encountered challenges, with revenue stagnating and net new assets declining in recent quarters. Regulators are particularly interested in disparities between the vetting procedures of Morgan Stanley’s financial adviser unit and those of E*Trade, prompting inquiries into the integration of E*Trade’s technology into Morgan Stanley’s processes. 

Other News

ECB Eyes June Rate Cut Amid U.S. Inflation Worries 

The European Central Bank (ECB) has left interest rates unchanged but signaled a potential cut as soon as June amidst concerns over slowing inflation and wage growth, despite U.S. inflationary pressures.  

Nasdaq Hits Record High Amid Tech Stock Rebound 

The Nasdaq Composite surged to a new all-time high as tech stocks led a market rebound, fueled by softer-than-expected wholesale price data which eased concerns over inflation, with notable gains in Amazon, Nvidia, and Apple stocks. 

Fed Rate Cut Prospects Uncertain Amid Inflation Concerns 

Firmer-than-anticipated inflation data has complicated the Federal Reserve’s outlook on rate cuts, with solid hiring and persistent inflationary pressures prompting a reconsideration of the timing and necessity of potential rate reductions. 

Share to

Industry Dynamics

Yen Soars to 6-Week High Amid Speculation of Intervention

On Thursday, the Japanese yen reached a six-week high, fueling speculation about possible government intervention. This development comes as the dollar faces widespread declines in anticipation of potential U.S. interest rate cuts in the coming months.

2024-7-18 | Industry Dynamics

Cold Storage REIT Lineage Aims USD19.2 Billion IPO Valuation

Lineage Logistics, a cold storage real estate investment trust (REIT), announced it is targeting a valuation of up to USD 19.16 billion in its upcoming U.S. IPO, potentially making it the largest listing of the year.

2024-7-17 | Industry Dynamics

Warren Buffett's Berkshire Hathaway Hits Record High

Berkshire Hathaway's stock reached a new peak on Monday, signaling robust investor confidence in Warren Buffett's stewardship.  

2024-7-16 | Industry Dynamics