SpaceX Bankers’ Drive to Police Retail Traders Sparks Backlash

A quiet effort by Morgan Stanley to prevent retail investors from placing multiple orders for shares of SpaceX in the rocket company’s massive initial public offering is facing pushback from some of the country’s largest brokerages.

Bankers at Morgan Stanley — one of the lead underwriters on the IPO — asked brokerages involved in arranging retail interest in the listing if they would send customer data to a third party that would ensure potential investors can’t create accounts on different platforms in the hopes of being allocated more shares in the offering, according to people familiar with the matter.

Some ...