Morgan Stanley to Pay $15M Fine Over Financial Advisors' Client Fund Theft Claims
According to the regulator, the firm's weak policies enabled hundreds of illegal transactions between 2015–2022.
The settlement includes a censure and requires MSSB to retain a compliance consultant to review all third-party cash disbursement procedures. The firm has already compensated affected clients for their losses.
This is not the first fine for MSSB this year, as Morgan Stanley’s unit paid a $1.6 million fine to the Financial Industry Regulatory Authority (FINRA) in February. According to FINRA’s statement, the penalty arises from the firm's repeated failures to promptly resolve failed inter-dealer municipal securities transactions and to take timely measures to secure physical possession or control of municipal security positions exceeding 30 calendar days.
SEC Charges Ian Bell
In a separate case, the SEC has charged Ian G. Bell, with orchestrating a sophisticated day-trading fraud scheme that targeted professional athletes and other investors, amassing over $1.3 million in ill-gotten gains.
The scheme, which operated from July 2020 to March 2023, ensnared at least 29 investors through a web of deception that included fabricated trading performance reports and false statements about investment returns. Bell allegedly exploited a network of referrals, as satisfied investors unknowingly promoted his fraudulent scheme to family and friends based on manipulated performance data.
“As for those individuals who are looking to follow in this defendant’s footsteps, know that your odds of getting away with it are exceedingly low,” he advised.
In the fiscal year 2024, SEC was able to collect a record $8.2 billion in recoveries and fines. The total amount jumped by 65.5% from $4.9 billion reported a year earlier.
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