Morgan Stanley Faces Regulatory Enforcement Action

Did you get a fair price on the purchase or sale of your bonds? FINRA recently fined Morgan Stanley $1 million and ordered $188,000 in restitution plus interest for (1) failing to provide the best execution in certain customer transactions involving corporate and agency bonds, and (2) failing to provide a fair and reasonable price in certain customer transactions involving municipal bonds.

FINRA found that Morgan Stanley failed to use reasonable diligence to ensure that the purchase or sale price to the customer was as favorable as possible under current market conditions in 116 customer transactions involving corporate and agency bonds. Additionally, in 165 transactions involving municipal bonds, Morgan Stanley failed to purchase or sell bonds at prices reasonably related to the fair market value of the subject security.

Thomas Gira, Executive Vice President, FINRA Market Regulation, said, “Firms must ensure that customers who buy and sell securities – including corporate, agency, and municipal bonds – receive execution prices that are consistent with prices available in the marketplace. FINRA will continue to sanction firms that execute fixed income transactions for their customers at unfair prices, and will require firms that violate such standards to reimburse customers.”

If you have concerns about the price paid or received for the bonds in your account, call a Florida securities arbitration lawyer from Crary Buchanan for a consultation regarding your investor rights.

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