Morgan Stanley to Pay SEC $3.6M for Failing to Protect Clients (1)

Morgan Stanley will pay $3.6 million to settle SEC allegations of failing to protect clients from employees’ misuse or misappropriation of funds.

Morgan Stanley Smith Barney LLC agreed to pay a $3.6 million fine to settle Securities and Exchange Commission claims the firm failed to protect client accounts from employee misbehavior, according to a June 29 agency order. The settlement follows February 2017 allegations that Morgan Stanley financial advisor Barry Connell misappropriated and misused $7 million from client accounts, the order said.

The firm has already repaid its clients in full with interest, according to an SEC statement. ...